Recent Trends in Belgium’s International Tax Policy

Recent Trends in Belgium’s International Tax Policy

• Edoardo Traversa and &
• Gaëtan Zeyen 

1. Université Catholique de Louvain, Louvain-la-Neuve, Belgium

   Edoardo Traversa and

2. Université de Liège, Liège, Belgium

   Gaëtan Zeyen

(Translated from the French by Karen B. Brown. Most footnotes in original omitted.)

International Tax System

Belgian residents are subject to tax on a worldwide basis. This means that they are taxed not only on income derived from Belgian sources, but also on income produced or collected abroad under the Income Tax Code of 1992 (CIR/92). Therefore, in Belgian tax law, the principle of territoriality suggests only that the Belgian authority to exert control over tax matters is limited to its own national borders. Because Belgium has the sovereign right to define the criteria for taxation, including tax on income from sources outside Belgium, there is the opportunity for double, or even multiple, taxation.

In the absence of a treaty, there is an exemption for certain income derived abroad, including income from immobile assets located outside of Belgium, income from professional activities abroad unless conducted with the support of Belgian establishments, and certain other income (such as prizes, subsidies, and rental income from persons who are not Belgian inhabitants).

When conventions for the prevention of double taxation (double taxation conventions) apply, Belgium generally eliminates double taxation of most revenue, except dividends, interest, and royalties. Although income determined to be sourced in the other contracting state under the treaty is exempt from Belgian tax, the exempted foreign source income is included in the tax base for the purpose of determining the top tax rate to be imposed on the remaining income subject to tax in Belgium.

In order to qualify for the exemption, the taxpayer must establish entitlement by presenting the appropriate documents to the Belgian tax administration. The exemption was automatic until 2010 when the government promulgated rules requiring demonstration of satisfaction of the conditions necessary for exemption prescribed by the applicable double taxation convention.

For a corporate shareholder with substantial holdings, there is a type of participation exemption for dividends received from its subsidiary. Although the dividend is included in the income tax base of the parent-recipient of the dividend, there is a 95 % deduction (revenus définitivement taxés or “RDT”). This deduction is available for dividends distributed by Belgian corporations, corporations organized in member states of the European Union (EU) or corporations organized in other jurisdictions. Eligibility for the participation exemption is detailed below.

The participation exemption is available only if the parent corporation meets certain ownership requirements and the subsidiary’s profits are subject to a minimum level of taxation. In order to meet the ownership requirement, the corporation receiving the dividend (la société bénéficiaire), for example, a resident corporation, must own i) at least 10 % of the stock of the distributing corporation (la société distributrice), for example, a foreign corporation, or a number of shares with a minimum cost of 2,500,000 euros (since 1 January 2010), and ii) establish ownership of the shares for at least one year before receipt of the distribution. In order to meet the minimum-level-of-taxation requirement, the profits of the foreign distributing subsidiary must be subject to a corporate income tax (either the Belgian l’impôt des Sociétés or an analogous foreign-imposed tax) with a base that is not more favorable than the one prescribed by Belgian law. The existence of a more favorable tax base in a foreign country is presumed if the nominal tax rate imposed on corporate profits is less than 15 % or if the country is listed as one with a more favorable regime by Belgian regulation.⁸⁸ In order to qualify for the participation exemption, dividends must also meet certain “anti-abuse” tests. Corporations resident in an EU Member State are presumed not to have a more favorable regime and therefore presumed to meet the minimum-level-of-tax requirement.

If the above conditions are not met, the dividend is taxed in the same fashion as ordinary profits, resulting in double taxation of distributed profits.

The Service des Décisions Anticipées (SDA) has ruled that dividends paid by a corporation subject to the tax regime of Curaçao qualify for the participation exemption because that country’s tax regime is analogous to that in Belgium. In addition, it has determined that a dividend distributed by a Tunisian subsidiary to it Belgian parent is not ineligible for the participation exemption even though the Tunisian tax regime provides a ten-year tax holiday on profits realized from exporting goods.

Tax Havens

The unavailability of the participation exemption, described above, for dividends paid by corporations resident in low-tax jurisdictions is one anti-tax haven initiative. There are additional initiatives to discourage investment in certain designated tax havens. The first is a requirement, effective 1 January, 2010, that all resident and nonresident corporations disclose all payments in excess of 100,000 euros directly or indirectly to persons established in jurisdictions found by the OECD Global Forum not to have substantially complied with the international standard for exchange of information or in jurisdictions with no- or low-taxation. A low- or no-tax regime is one in which the nominal tax rate is below 10 %. Payments that are not disclosed are not deductible. Even disclosed payments are not deductible if the taxpayer cannot establish that the transactions are real and that the payments are not to artificial entities employed to camouflage an arrangement constructed to avoid taxation. The list of no- or low-tax jurisdictions, consisting of about 30 countries,⁸⁹ is updated every two years.

Since 2014, taxpayers subject to l‘impôt des Personnes Physiques (IPP) must disclose ownership in a construction juridique. The term encompasses a legal entity (whether a corporation, partnership, or other entity which is a non-resident of Belgium which is not subject to Belgian income tax or is subject to a regime with a tax system more favorable than Belgium’s regime. This latter category includes any Stiftungen or any corporation with its residence in a tax haven. Ownership in any entity appearing on a special list issued by decree (l’Arrêté Royal) must be disclosed. This list, which will be updated, includes the Delaware Limited Liability Company, la foundation Suisse, the Bahamian International Business Company, entities resident in a number of Caribbean countries, and la Stiftung et l’Anstalt du Liechtenstein. There is no penalty for failure to make the required disclosure under the new law, but under general regulations, non-disclosure may be penalized by an administrative fine or even an increase in tax liability.

In 2016, a transparency tax (“taxe de transparence”), informally known as the Cayman tax, entered into effect. This measure will permit the fiscal administration to tax revenue derived by foreign juridical entities (trusts or companies subject to a tax rate below 15 %) by associating it with the creator of the enterprise, his heirs, third-party beneficiaries, or shareholders who are Belgian residents.

In addition to the legislative initiatives noted above, there are two developments in internal tax law, which, although not aimed specifically at particular jurisdictions, may provide a disincentive to Belgian taxpayers to transact business with non-residents. The first is under l’article 54 du CIR/92 (Article 54), which allows the Belgian tax administration to deny deductions for payments of interest, royalties and other mobile income, such as professional expenses, when paid to a non-resident (targeted by l’article 227 du CIR/92) (Article 227) which is either not subject to an income tax or subject to an income tax regime which is notably more advantageous than that to which revenue derived in Belgium is subject. Article 54 may have the effect of encouraging investment in a resident company in order not to fall within the purview of these limitations on deductions. The European Court of Justice found this scheme incompatible with the free movement of services and not applicable to member states of the EU in particular because of uncertainty in the application of the regulation.

The second is an anti-abuse initiative which is preventative in nature. This rule, set forth in l’article 344, §2 du CIR/92 (Article 344), generally, for purposes of the income tax and other direct taxes, allows the tax authority to ignore sales, loans, capital contributions, transfers of patents, trademarks, and other intellectual property, or sums of money between a Belgian taxpayer and an entity not subject to an income tax or subject to a tax regime considerably more advantageous than that in Belgium unless the taxpayer establishes either legitimate business, financial, or economic reasons for entering into the transaction or demonstrates receipt of substantial profit effectively subject to tax in Belgium that otherwise would not have been derived if the transaction had not taken place.

The point of the anti-abuse initiative is to battle tax avoidance consisting of the transfer of ownership of mobile assets to destinations outside the reach of the Belgium tax system. According to A. Nollet, this article combines a number of anti-evasion techniques found in Belgian law: rebuttable presumption of tax avoidance purpose, the fiction that the tax administration may not disregard or re-characterize actions taken primarily to avoid tax and not for a business reason, stigmatization of foreign tax regimes, and reallocation of income between related taxpayers. As discussed above and for the same reasons, the anti-abuse initiative may not be applied to residents of member states of the EU.

Tax Measures to Discourage Investment in Harmful Tax Jurisdictions

There is no notion of “harmful tax regime” in Belgian law. However, paralleling the idea of the state with no- or low-taxation is the tax regime notably more advantageous than that in Belgium, which might be termed a regime “unfairly competing for Belgian revenue or investment.” This latter type of regime is targeted in provisions concerning: disclosure requirements, requirements for minimum levels of taxation in order to receive certain tax benefits, and certain anti-abuse requirements.

In addition, tax treaties concluded by Belgium also anticipate the existence of conditions similar to those present in harmful tax regimes. In these treaties, such as those with Morocco, Hong Kong, and Rawanda, certain exemptions are not available unless the income in question is subject to tax in the source country. This would exclude exemptions under treaties with countries with so-called harmful regimes.

Rules or Agreements Prohibiting Discrimination in Favor of Certain Kinds of Investment

Belgium was one of the founding members of the EU. It is, therefore, bound not only by the European law derived from the Treaty founding the European Union (le Traité sur l’Union européenne) and the Treaty governing the operation of the EU (le Traité sur le Fonctionnement de l’Union européenne – T.F.U.E), but also by derivative community law (regulations, directives, decisions, advice and recommendations).

The T.F.U.E. is founded on the principle of nondiscrimination on the basis of nationality and includes specific rules on the free circulation of capital and payments (Articles 63 to 66 of T.F.U.E.) and State aid. The rules concerning the free movement of capital apply equally to EU members as well as non-members. Under these rules member states may not enact fiscal measures that make investment in a covered country less attractive than investment in the home country.

In matters of State aid, the T.F.U.E. adopts the principle that such measures, in whatever form, are incompatible with the common market to the extent that they affect transactions between member states or distort competition by favoring certain enterprises or modes of production. There are exceptions anticipated by the treaty and interpreted by the European Commission’s Court of Justice. The State aid prohibition also applies to tax provisions.

In addition to the above “hard law” concerning State aid, there is also “soft law” employed by the EU institutions to battle unfair competition among member states to attract investment into their respective territories. In 1997, the EU adopted a Code of Conduct concerning taxation of enterprises aimed at measures within the community having the effect of localizing economic activity. Under the Code, member states must begin to dismantle existing competitive fiscal measures and refrain from introduction new measures of this type. Whether measures are forbidden by the Code is determined by an ad hoc Primarolo group (groupe Primarolo). Notably, Belgium was forced to abandon its centers of coordination and to adopt its notional interest regime (le régime des intérêts notionnels) after adoption of the Code of Conduct as well as the State aid prohibitions.

Instances of application of “soft law” have extended to actions taken against aggressive tax planning, for example, by techniques resulting in double non-taxation, such as twice deducting the same loss (in the country of source as well as the country of residence). In connection with the battle against tax avoidance or evasion, the Commission issued a plan of action on 6 December 2012 to reinforce its efforts and to make recommendations concerning relationships between member and non-member states. The European Parliament sustained these initiatives 21 May 2013.

OECD Global Forum

Following the example of most other countries, Belgium participates in the OECD’s Global Forum on Transparency and Exchange of Information. The Belgian anti-double taxation conventions generally follow the OECD Model treaty. However, Belgium initially did not accept the clause requiring exchange of information covered by bank secrecy (¶5 of Article 26 of the 2004 version of the Model treaty) and did not integrate it into its treaties. This caused the OECD to place Belgium on the “grey list” of tax havens. After international pressure, Belgium relented and began to include this clause in its treaties. Since 2009, new treaties and protocols integrate this clause, causing Belgium to be removed from the “grey list” in autumn of 2009.

Exchange of Information

In the course of the past several years, many secondary legal documents have been adopted which aim to reinforce the transparency and exchange of information in fiscal matters among the member states of the EU. This includes Directive 2011/16/UE, of 15 February 2011, relating to administrative cooperation in fiscal affairs (abrogating Directive 77/799/CEE, effective 1 January 2013). This directive applies to all types of taxes imposed by member states (or in the name of a member state) or by territorial or administrative entities, including local authorities (with the exception of VAT, customs duties or excises, and mandatory contributions). The Directive references three types of exchange: on demand, automatic, and spontaneous. It also includes a “most favored nation” clause requiring a member state to extend to another member state more extensive cooperation measures if they are provided to a non-member state. This clause did not appear in Directive 77/799/CEE.

Concerning collection, Directive 2010/24/UE of 16 March 2010, concerning mutual assistance in recovery of debts relating to taxes, duties, and other measures, allows several forms of mutual assistance more particularly regarding exchange of information (either on demand or with prior notice).

Since 2011, Belgium no longer proceeds in accordance with the Savings Directive of 2 June 2003 (2003/48/UE) which was repealed in 2015 concerning reporting obligations for interest payments. Instead, it engages in automatic exchange of information regarding this type of revenue.

After a flurry of activity in 2009 and 2010, Belgium has negotiated about 40 treaty protocols based on the exchange of information provisions of the OECD Model Treaty (Article 26, §5) or Tax Information Exchange Agreements (TIEAs), including those with countries considered tax havens, including Andorra, the Bahamas, Belize, Liechtenstein, Saint Kitts and Nevis and the Grenadines.

In April, 2014, Belgium concluded an accord with the U.S. under the Foreign Account Tax Compliance Act (“FATCA”), which put into place automatic exchange of financial information between the two countries. This agreement, which has already been ratified by Belgium, details the types of information that must be exchanged, as well as the timing and practical mechanisms for the exchange.

Tax Incentives for Investment in Developing Countries

While Belgian legislation no longer provides tax incentives for investment in emerging or developing countries, such provisions existed in the past. Tax sparing clauses (providing for a fictional tax credit for taxes not paid) appeared in former treaties with Brazil, India, China, Malaysia, Philippines, South Korea, Greece, Turkey, Spain, Portugal and Singapore.

In internal law, the Quotité Forfaitaire d’Impôt Etranger (Q.F.I.E.) attempted to partially remedy double taxation by allowing, in certain cases, imputation of foreign tax for purposes of the Belgian tax. Originally, the Q.F.I.E. applied to foreign source interest and had a tax sparing-like quality presuming payment of a tax of 15 % or more (depending on the applicable anti-double taxation convention) to the source country. As a result, because the presumptive tax, in certain cases, exceeded the actual foreign tax paid, this provided an incentive to invest abroad, notably in developing countries. However, this provision supported establishment of a number of tax-avoidance schemes and caused much litigation in Belgium regarding these operations. It was, therefore, modified to eliminate the presumptive tax element. The abuses it generated had an impact in the realm of politics, as Belgium suffered the criticism of the OECD on the effectiveness of such tax sparing clauses.

However, one observes in Belgian international fiscal policy, a growing interest in emerging, developing, or transitional countries (particularly Brazil, Russia, India and China) which is reflected in the treaty practice to accord jurisdictional preference to tax to source countries. This influence is also found in the OECD Model Treaty, for example, in matters of “technical assistance” or “technical services.” Developing or transitional countries desire the power to tax these payments at their source (such as royalties under article 12 of the treaty) even when they are not attributable to a permanent establishment situated within their territory or even when such services are not physically performed in the state. While the Belgian tax administration finds this position taken by developing or transitional countries to be contrary to article 12, Belgium has acceded to such a provision, notably with Brazil (which may apply a withholding tax at the source of 10 % for copyrights, 20 % for trademarks or service marks, and 15 % for other intellectual property payments) or with India (20 % rate applicable under the convention, but reduced to 10 % under a “most favored nation” clause).

Fiscal Incentives for Former Colonies or Protectorates

Belgium has not instituted a favorable tax regime or tax incentives for investment in favor of its former colony, Democratic Republic of Congo (“Congo”), or its former protectorates, Burundi and Rwanda. Moreover, the anti-double taxation convention with the Congo did not even come into force until December, 2011. Burundi was placed on the list of countries presumed to have a competitive fiscal regime in relation to Belgian corporate tax, les revenus définitivement taxes, as described above.

Tax Measures to Attract Foreign Investment

Despite the repeal of the favorable tax regime for Centers of Coordination, Belgium has retained several special tax deductions relative to the corporate tax (l’Impôt des Sociétés) and incentives designed to attract foreign investment.

Among the tax regimes applicable to l’Impôt des Sociétés – apart from the R.D.T. regime – there is: (i) the deduction for risk capital (deduction of notional interest) that permits corporation to claim a fictitious deduction from the tax base of invested capital property for notional interest (see section “Corporate Tax Rates” below), (ii) the deduction for income from patents, which allows enterprises to deduct from their tax base 80 % of royalty income, and (iii) a tax shelter regime that favors production of audiovisual works (a fiscal measure aimed at the cinematography and or audiovisual industries).

Paralleling these tax regimes relating to the corporate tax, Belgium has organized, through issuing a simple administrative circular on 8 August 1983, a tax regime particularly favorable to a specialized group of non-resident managers who benefit on the one hand from reimbursement of expenses tied to expatriation (non-repetitive expenses, such as those relating to moving to Belgium and settling into Belgian lodging, as well as repetitive expenses such as the cost of child schooling) and on the other hand, from tax solely on Belgian source revenue (that is to say that remuneration connected to activities exercised outside of Belgium are in principal excluded from the tax base).

It should also be noted that the Belgian tax regime applicable to holding companies is rather favorable and concerning the withholding tax (on mobile income such as dividends, interest, and royalties) there are numerous exceptions resulting either from CIR/92 (compare article 264) or from articles 102 et. seq. of the AR (Arrêté Royal)/CIR92. Thus, articles 105 and 106 of AR/CIR92 enumerate different categories of taxpayers eligible for an exemption from the withholding tax. One of the categories so favored by the Belgian legislature is that of nonresident investors.

Concerning research, apart from the deduction for revenue from patents, Belgium has provided other favorable measures, such as a deduction for investment in research, a tax credit, and a regime of partial exemption from payment of the professional withholding tax retained from the remuneration of scientific researchers.

Tax Amnesty

Between 2004 and 2014, Belgian has held three successful rounds of tax regularizations in the form of three Free Tax Declarations (Déclarations Libératoires Uniques or D.L.U.). The first, applicable 1 January to 31 December 2004, had the goal of repatriating certain assets not declared (placed in tax havens) in Belgium. The second (D.L.U. bis) was organized in 2006 under the form of a procedure of tax regularization said to be permanent, which ended, however, 14 July 2013. This D.L.U. bis benefited physical as well as moral taxpayers and targeted all revenue, mobile revenue (such as interest, dividends, and other capital issued from an estate), professional revenue, as well as revenue arising from the value added tax (TVA). Finally, from 15 July 2013 (during a strictly limited time period) to 31 December 2013, a third tax and social regularization (D.L.U. ter) was organized. It targeted not only the revenue sought by D.L.U. bis, but also certain prescribed revenue – that resulting from serious and organized tax fraud as well as professional revenue which should have been paid as social security contributions. A new permanent regularization scheme has been introduced in 2016.

In conclusion, it is notable that the mechanism for addressing the criminal tax transaction has been broadened by the laws of 14 April and 11 July 2011. Article 216bis of the Code of Criminal Instruction (le Code d’Instruction Criminelle). Henceforth, that article provides that:

For tax or social infractions that have allowed avoidance of obligations to pay tax or make a social contribution, the transaction is not allowed until payment is made by the perpetrator of the tax due or social contributions owed, plus interest, if the tax or social administration agree.

Corporate Tax Rates

In general, the rate of tax imposed on corporations (l’Impôt des Sociétés) is 33 %, plus a 3 % addition entitled “complementary emergency contribution,” bringing the total rate to 33.99 %. However, for small corporations, the CIR/92 provides progressive reduced rates. These base rates are reduced for a fictional accounting deduction for at-risk capital (or deductions for notional interest). This measure, in effect, allows corporations to deduct from the tax base, fictionally, interest supposedly paid on capital stock, which is interest qualified as “notional.”

The deduction for at-risk capital (or for so-called notional interest) is available for all taxpayers subject to the corporate tax. This includes Belgian corporations, but also associations, which are establishments (i) with a juridical personality, (ii) engaged in an enterprise or in lucrative operations, and (iii) have in Belgium their head office, principal establishment, or their seat or direction or administration. A law, dated 22 June 2005 covers other persons subject to the corporate tax (l’Impôt des Sociétés) by virtue of articles 179 through 182 of CIR/92, notably the false “ASBLs,” or civil corporations, taking the form of a commercial corporation. Finally, small corporations are equally covered (to the extent they renounce the option of not reporting annual accounts), as well as foreign corporations having a permanent establishment in Belgium.

Limitations on Tax Incentives for Foreign Investment

The EU prohibitions on State Aid found in the Treaty on the Functioning of the European Union make any foreign investment incentives incompatible with the internal market to the extent that they affect transactions between member states or threaten competition by favoring certain enterprises or modes of production. The State Aid prohibitions primarily have application inside the EU (and the member state in question) because its main goal is to prevent protectionist measures relating to national operators so that they do not limit competition between enterprises.

Moreover, the freedoms of movement guaranteed by the Treaty opposes anti-competitive actions of member states concerning internal situations versus transactions outside the EU. A particularly interesting example is a ruling (arrêt) by the European Court of Justice (C.J.U.E) regarding a salaried activity by a German tax resident (M. Petersen) outside of the EU territory (in Benin) for a foreign development aid project by the Danish Agency for International Development. In this case, the German tax authorities refused to grant M. Petersen an exemption from tax on this income derived in Benin on the ground that his employer was not a resident and neither M. Petersen nor the employer came under the jurisdiction of German public development aid. The ruling in question permitted the C.J.U.E. to affirm that legal measures of the EU (including the principle of nondiscrimination) may apply equally to professional activities exercised outside of the EU territory, considering that the work relationship holds a sufficiently direct connection to the territory. In this case, the court also ruled that “article 45 of the T.F.U.E. must be interpreted in the sense that it opposes a national regulation by a member state according to which revenue, collected for a salaried activity by a taxpayer resident in this member state and subject to unlimited taxation, is excused from income tax when the employer is resident of that state, but not when the employer is resident in another member state.”

In connection with its policies concerning tax governance in non-member countries, the European Commission recommends that member states take measures against tax havens which do not respect minimum standards of good governance. In a 2012 recommendation, the Commission established criteria to determine which non-member states do not meet the standards, notably in reference to the criteria fixed by the Code of Conduct regarding taxation of corporations (see 4.1 above). Tax measures providing for tax rates considerably lower than those generally applied in the country in question, and especially a tax rate of zero, must be considered potentially harmful. Harmful tax competition may result from the imposition of a nominal base rate of taxation or any other pertinent factor. The Commission recommends scrutiny of the following factors, among others:

• (i) tax advantages are provided exclusively to non-residents or for transactions concluded with non-residents,

• (ii) tax advantages are totally removed from the domestic economy so that there is no effect on the national base tax rate,

• (iii) tax advantages are provided even in absence of real economic activity or a substantial economic presence within the country offering them,

• (iv) the rules for determining profits resulting from internal activities of a multinational group depart from those generally accepted on the international level, particularly the rules approved by the OECD, or

• (v) tax measures are not transparent, especially if legal issues are resolved flexibly in a nontransparent way on the administrative level.

Foreign Investment Protection

On the multilateral level, concerning protection of foreign investment, Belgium has signed and ratified the Washington Convention of 18 March 1965 for the regulation of investment between the signatory States and their nationals. This Convention entered into force for Belgium on 29 September 1970. While the first objective of such a convention is not tax matters, certain measures adopted (by legislation) in relation to foreign investment must be examined precisely under a purely fiscal lens, including, for example, the question whether legislation with a fiscal scope may be treated as a direct or disguised expropriation (and consequently, prohibited in principle) from the perspective of the foreign investor or as prohibited discrimination (in connection with the so-called “most favored nation clause”).

In addition to the Washington Convention, noted above, in the area of energy, Belgium is a member of the Energy Charter Conference of which the multilateral treaty (Energy Charter Treaty, E.C.T.) contains a specific tax provision (cf. Article 21 ECT).

Belgium is equally a signatory state to different agreements creating international organizations which contain tax immunity clauses. For example, the Agreement creating the Asian Development Bank contains a provision, Article 56, §1, providing that: The Bank, its assets, possessions, revenue and business transactions are exempted from all national or local taxes as well as customs duties.

Paralleling these multilateral agreements, Belgium has concluded in the course of the last few years certain reciprocal bilateral investment treaties, which is the case of the signing on 6 November 2007 of an Agreement Concerning the Reciprocal Encouragement and Protection of Investments between the Belgium-Luxembourg Economic Union (l’Union économique belgo-luxembourgeoise (U.E.B.L.) and Qatar. Similarly, agreements recently concluded between U.E.B.L. and the Republic of Tadjikistan (dated 10 February 2009), Montenegro (dated 16 February 2010), and the Republic of Kosovo (dated 9 March 2010). These bilateral investment accords, which must be ratified by the Parliament, do not include tax measures.

On a strictly institutional level, it must be noted that since the advent of the Lisbon Treaty (1 December 2009), the European Union is in principle sovereign over common commercial policy, including those relating to foreign direct investment. Consequently, it is within the province of the EU to negotiate such accords, with the member states required to request permission from the EU, given only under strict conditions, to be able to lead their own negotiations. However, with the EU having no specific expertise in tax matters (and certainly not in matters of income tax), the commercial accords should not affect tax treaties concluded by member states.