WRITTEN QUESTION E-3143/02

by Christa Randzio-Plath (PSE) to the Commission

(4 November 2002)

Subject: Article 14 of the Protocol on the privileges and immunities of the European Communities of 8 April 1965

Article 14 of the Protocol on the privileges and immunities of the European Communities of 8 April 1965(1) lays down that: Movable property belonging to persons referred to in the preceding paragraph shall be exempt from death duties in that country.

Can the Commission inform me of the manner in which Belgium treats EU officials as regards the imposition of death duties on immovable property situated in Belgium and/or in the Member States and on movable property situated in the territory of another Member State? Is it true that, where death duties apply at all in Belgium, that country invokes a general clause in order to impose death duties on movable and immovable property situated in another Member State?

(1) OJ L 152, 13.7.1967, p. 15.

Answer given by Mr Bolkestein on behalf of the Commission

(17 December 2002)

The Honourable Member is seeking an explanation of the system of inheritance tax applied by Belgium to the movable and immovable property of EU officials.

Article 14 of the Protocol on the privileges and immunities of the European Communities stipulates that, for the application of death duties, officials and other servants who, solely by reason of the performance of their duties in the service of the Communities, establish their residence in the territory of a Member State other than their country of domicile for tax purposes at the time of entry into service, are to be considered, both in the country of residence and the country of domicile for tax purposes, as having maintained their domicile in the latter country, provided it is a member of the Communities. The same applies to spouses not gainfully employed in the host country and to dependent children.

Though living in Belgium, the persons in question are therefore held to have maintained their domicile for tax purposes in the Member State in which they were domiciled for tax purposes at the time of entry into service. Their movable estate is thus subject to the national law and international agreements of that Member State. This is why the second subparagraph of Article 14 of the Protocol exempts their movable property in the territory of the country in which they are staying Belgium from death duties in that country. Such property is subject to the legislation of the Member State in which they are domiciled for tax purposes, as is their movable property outside Belgian territory. These rules are based on a universal principle of international law, namely that movable property is taxed in the country in which the deceased was domiciled for tax purposes.

Article 14 of the Protocol does not concern immovable property in Belgium. Immovable property in Belgium, including that of non-residents, is subject to inheritance tax in that country. Belgian law in this respect is based on the widespread practice, enshrined in international conventions on the avoidance of double taxation, of taxing immovable property in the country in which it is located, with a tax exemption or rebate in the country of domicile for tax purposes.

In the case of persons not satisfying the conditions of Article 14 of the Protocol, who are therefore deemed to be resident in Belgium at the time of their death, Belgium applies death duties to the whole of their estate, charging inheritance tax due in another country on immovable property located outside Belgium.