1970 Treaty between Belgium and US – Belgian Supreme Court decides that reduction of tax credit for foreign interest by multiplication with a debt financing coefficient is compatible with treaty

On 15 March 2013, the Belgian Supreme Court (Cour de Cassation/Hof van Cassatie) decided two cases (recently published) on the avoidance of double taxation on interest under the former Belgium - United States Income Tax Treaty (1970) (as amended through 1987). Details of the case are summarized below.

(a) Facts. Belgian companies received interest from US companies under the 1970 treaty with the United States. The receiving Belgian companies had debts. Therefore, the amount of the fixed cr…