A new Belgium-France Double Taxation Treaty, signed on 9 November 2021, is now in force and applies to income received from 1 January 2025, replacing the previous treaty of 10 March 1964. It governs the allocation of taxing rights between the two countries for residents and businesses operating across the border, following modern OECD principles. The points below describe the new treaty; the 1964 treaty remains relevant only for income relating to years up to and including 2024.
Employment income is generally taxed in the country of residence unless the work is physically performed in the other country, in which case the work state may tax the income earned on its territory. There is no special frontier-worker regime under the treaty: the historic border-zone regime has been phased out (abolished for Belgian residents and progressively withdrawn for French residents, who keep it under grandfathering conditions until 2033). Belgium relieves double taxation mainly through exemption with progression — French-source income that is exempt in Belgium is still taken into account to set the rate applied to the taxpayer’s remaining Belgian income.
For dividends, the new treaty caps French source withholding at 12.8%. Importantly, the minimum 15% foreign tax credit (the “FBB” / “QFIE”) that the 1964 treaty obliged Belgium to grant on French dividends has been abolished under the new treaty. As a result, for income from 2025 onward the net dividend after French withholding remains taxable in Belgium at 30%, so Belgian residents are generally taxed more heavily on French dividends than before. (For pre-2025 income under the 1964 treaty, Belgian case law confirmed the minimum 15% FBB credit, which the tax authorities now accept.) Interest and royalties are, in principle, taxable only in the recipient’s country of residence.
Real estate income and capital gains from real property are taxed in the country where the property is located, regardless of the owner’s residence. This rule has significant implications for Belgians purchasing French vacation homes or French residents investing in Belgian real estate.
Private pensions are generally taxable in the recipient’s country of residence, while public-sector pensions remain taxable in the paying state. The treaty includes exchange of information provisions and anti-abuse clauses aligned with the OECD BEPS standards to combat tax evasion and ensure transparency.
For Belgian residents with French income or assets, and French residents with Belgian connections, understanding treaty provisions is essential for tax planning and compliance. Professional guidance ensures optimal use of treaty benefits while meeting all reporting obligations.
This content is for informational purposes only and does not constitute legal or tax advice. Always consult a qualified tax advisor for matters specific to your situation.