Court of Appeal Ghent reclassifies interest as dividends

On 8 May 2012, the Court of Appeal Ghent gave its decision in the case of the Belgian State v. DC BvBA (Case No. 2011/AR/456) on a reclassification of interest into dividends. Details of the case are summarized below.
(a) Facts. In 1998, two individuals, both resident in Belgium, sold bearer shares to the company DC BvBA ("taxpayer"). The taxpayer remained indebted for the purchase price, which was booked on the taxpayer's current account. The taxpayer paid an interest compensa…