Ruling confirms continued access to exemption regime
The Belgian Ruling Office has once again confirmed that dividends received from a Hong Kong subsidiary can benefit from the Belgian participation exemption regime. This regime allows a Belgian company to receive qualifying dividends from subsidiaries abroad largely tax-free, thereby preventing double taxation of the same profits within a corporate group.
In its decision of 20 January 2026 (Nr. 2025.0887), the Ruling Office reconfirms its position it has already adopted on several occasions: Hong Kong does not qualify as a ‘tax haven’ for these purposes. This confirmation is particularly relevant for international group structures involving Asian operations, where Hong Kong often serves as a regional hub.
Structure under review
The case concerned a Belgian entrepreneur operating through an international structure, with activities spanning Europe and Asia. A Belgian holding company was set up with operating subsidiaries in both Hong Kong and Luxembourg. These subsidiaries were expected to distribute dividends to the Belgian parent company.
The key question was whether those dividends could benefit from the participation exemption in Belgium, thereby avoiding additional corporate taxation at the level of the holding company.
Why Hong Kong passes the test
In assessing the eligibility of the Hong Kong entities, the Ruling Office focused on several key elements:
- First, the corporate tax system in Hong Kong remains based on a standard rate of 16.5%, with a reduced rate of 8.25% applying to a limited portion of profits under a two-tier system. Despite this preferential element, the overall framework is not considered significantly more advantageous than the Belgian regime.
- Second, Hong Kong is no longer listed as a non-cooperative jurisdiction by the EU. Following legislative changes, including the introduction of a foreign-sourced income (FSIE) regime, it has also been removed from the so-called ‘grey list’. This evolution reinforces the perception of Hong Kong as a compliant jurisdiction from an international tax perspective.
- Finally, the territorial nature of the Hong Kong tax system (where only locally sourced income is taxed) does not, in itself, lead to the conclusion that the regime is excessively favourable. Belgian administrative guidance has consistently taken this view.
Treaty support & administrative position
The applicable tax treaty between Belgium and Hong Kong (Article 22 (2) b DTA) confirms that dividends received by a Belgian company may be exempt in Belgium, subject to the conditions of Belgian domestic law. Belgian administrative guidance further clarifies that the Hong Kong tax system does not fall within the category of regimes that would exclude access to the participation exemption.
This position has been stable over time and is supported not only by administrative practice but also by earlier parliamentary statements confirming that dividends from Hong Kong entities should not be excluded from the regime.
Role of ‘tax haven’ lists
A recurring theme in the analysis is the reference to various ‘tax haven’ lists. These lists exist at different levels and serve different purposes:
At EU level, a list of non-cooperative jurisdictions is maintained and updated periodically. Hong Kong is no longer included on this list, nor on the monitoring list that tracks jurisdictions requiring further reforms.
Following the most recent update, the EU list of non-cooperative jurisdictions for tax purposes now includes 11 countries: American Samoa, Anguilla, Fiji, Guam, Palau, Panama, Russia, Samoa, Trinidad and Tobago, the U.S. Virgin Islands, and Vanuatu. In addition, the so-called ‘grey list’ currently comprises Armenia, Belize, the British Virgin Islands, Costa Rica, Curaçao, Eswatini, Malaysia, the Seychelles, Turkey, and Vietnam.
At Belgian level, a separate list exists for jurisdictions with no or low taxation. This list is based on objective criteria such as the absence of corporate tax or very low nominal rates. Hong Kong does not meet these criteria and is therefore not included.
Based on these criteria, the list currently comprises 30 jurisdictions. It has been expanded to include the Marshall Islands, Uzbekistan, the Pitcairn Islands, Somalia, and Turkmenistan, while Andorra, the Maldives, and Moldova have been removed. The Belgian tax authorities also treat Monaco as a tax haven, as companies there are only subject to income tax if they carry out specific activities.
In addition, jurisdictions that do not meet the OECD standards on transparency and exchange of information are also treated as tax havens. These international standards play an important role in the assessment, although Hong Kong has aligned its framework in recent years.
Practical takeaway
The recent ruling confirms a consistent and pragmatic approach: Hong Kong entities remain eligible for the Belgian participation exemption, provided the standard conditions are met. For taxpayers, this provides welcome certainty. Despite ongoing international scrutiny of low-tax jurisdictions, Hong Kong continues to be viewed as a sufficiently compliant and taxed environment for Belgian tax purposes.
In practice, this means that dividend flows from Hong Kong subsidiaries to Belgian holding companies can still be structured efficiently, without triggering the exclusion rules typically associated with tax havens. That said, the analysis remains fact-driven. Taxpayers should ensure that the relevant conditions are met in each case and remain attentive to future developments, particularly in light of the evolving international tax landscape.