On 13 September 2007, reference was made to the European Court of Justice (ECJ) by the Brussels Court of Appeal for a preliminary ruling in the case KBC Bank NV v. Kingdom of Belgium.
(a) Background. Under Belgian tax law, intercorporate dividends which qualify for the participation exemption are first included in profits. Subsequently, 95% of the dividends is deducted, but the dividends are not deductible from certain non-deductible expenses. If the …