Circular letter clarifies how to reclaim withholding tax

Belgian tax law and double tax treaties concluded by Belgium provide for a number of withholding tax (WHT) exemptions and reduced rates for wages and movable income (including dividends, interest and royalties).

Exemptions and reduced rates may be claimed at source or via refund. A reclaim of (unassessed) wage tax and withholding tax on dividends, interest and royalties should be filed within a five-year period starting January 1st of the year the withholding taxes were paid. For certain wage tax exemptions, a period of three years is foreseen, starting from January 1st of the year following the tax year (art. 368 and 368/1 ITC92).

These claims are generally processed through an administrative appeal, followed by an appeal before the court if the tax authorities delay or deny the refund. 

Recent case law of the Belgian highest courts (Supreme Court 21.12.2023 and Constitutional Court 13.03.2025) created uncertainty on whether the five- or three year statute of limitations applies only to the administrative appeal procedure or also to the legal procedure before court.  

The Supreme Court clarified that, pursuant to article 368 ITC92, the five-year period for reclaiming unassessed withholding taxes constitutes a statute of limitation for lodging an appeal before the court. The Constitutional Court confirmed this interpretation, noting that in the absence of a formal tax assessment, taxpayers are entitled to file an appeal with the courts within the five-year period, without the prerequisite of initiating an administrative appeal.

In light of this recent case law and ongoing discussions, the Tax administration issued Circular letter 2025/C/56 on September 10, 2025 (NL / FR), maintaining its previous position and offering additional clarification.

In the Circular letter, the Tax administration confirms that, since articles 368 and 368/1 ITC92 are included in Chapter VII, ‘Legal Remedies’, Section 1, ‘Administrative Appeal’ of the Income Tax Code, refunds of withholding taxes should be requested through an administrative appeal, filed within the applicable five- or three-year period. If such an appeal is deemed admissible, any subsequent legal action initiated after the expiration of this limitation period will not be considered inadmissible and, consequently, will not be challenged by the tax authorities in court.

On the other hand, if a taxpayer directly files an appeal before the court without first filing an administrative appeal, the tax administration will consider this action inadmissible, even if the appeal is filed in court within the five- or three- year period. 

With the new Circular Letter, the Tax Authorities reconfirm their position that taxpayers must ensure that administrative appeals are always lodged within a period of five years starting from January 1st of the year in which the wage tax or withholding tax was levied (or within a four-year period regarding certain exemptions). It is equally important to ensure that the administrative procedure is always initiated prior to initiating legal proceedings. Failure to do so could result in the legal action being declared inadmissible.

It remains however important to understand how the courts will respond to the Tax Authorities’ position which remain the Tax Authorities’ opinion only. Pending an amendment of the legislation clarifying this position, it may be advisable to still lodge an appeal with the courts (besides and after initiating an administrative appeal) within the three- or five-year period in order to safeguard all rights.

EY can assist with identifying reclaim opportunities in respect of Belgian-sourced income. EY is also available to assist with the preparation and submission of administrative claims. Moreover, in close collaboration with EY experts, our colleagues of EY Law can help you initiating court proceedings to the extent necessary.  Please reach out for tailored support regarding your specific tax situation.