In Belgium a 7% supplementary local tax is applicable for non-resident taxpayers, calculated on top of federal progressive income tax. On March 12, 2026 the European Court of Justice ruled in case C-119/24 that current Belgian tax legislation in this respect constitutes an infringement of the free movement of workers.
Infringement of EU law
The 7% additional local tax rate, which is applicable uniformly to individuals who are non-resident taxpayers in Belgium, is established by analogy with the supplementary municipal tax which is payable by tax residents of Belgium. For tax residents of Belgium this additional communal tax rate is not always the same rate, as it ranges from 0% to 9% depending on the commune of residence. Consequently, for non-resident taxpayers in Belgium, the surcharge of 7% leads to a heavier tax burden than imposed on tax residents, notably in those Belgian municipalities where there is no supplementary municipal tax or where the communal tax rate is lower.
Indeed, tax residents of Belgian municipalities without a supplementary communal tax (currently only Knokke-Heist) or where the relevant communal tax rate is lower than 7% are treated more favourably than non-residents from an income tax perspective. The European Court of Justice ruled that current Belgian tax legislation constitutes an infringement of the free movement of workers (stipulated in article 45 TFEU) without proper justification, where the supplementary municipal tax of 7% results in a higher tax burden than imposed on tax residents of Belgium in respect of the same income.
This case law could have significant consequences for Belgium, where the 0% supplementary communal tax in certain coastal municipalities has already been challenged for many years on the basis of inequality in a different context, notably with respect to taxes for second-home owners versus full-time residents.
It remains to be seen what actions Belgium will take, although possibilities are limited. To be continued.
For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:
Philip Maertens
Partner
Nic Boydens
Partner
Bart Elias
Partner
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