Background: the tax surcharge for non-residents
Tax residents of a foreign country who earn income in Belgium – whether through employment, business activities, real estate ownership, capital assets and movable goods, pensions or certain types of miscellaneous income – are subject to Belgian non-resident income tax (belasting van niet-inwoners / impôt des non-résidents). As part of that tax regime, the Belgian federal government charges them a surcharge of 7% on top of their income tax liability. In the period 2021-2024, the revenue from the surcharge amounted to between EUR 74,980,000 and EUR 79,900,000.
The surcharge was designed as an equivalent to the municipal surcharge that Belgian residents pay to their local authority. The rates of municipal surcharge vary significantly among Belgium's 565 communes – from nil to 9%, with an average of approximately 7%.
The logic behind the non-resident surcharge seemed straightforward: since non-residents are not attached to any specific Belgian municipality, a uniform federal rate of 7% is applied instead. For years, this arrangement was considered legally sound, including by the Constitutional Court in 2019.
The Court of Justice of the EU finds the surcharge incompatible with EU law
In a landmark judgment dated 12 March 2026 (Chefquet, Case C-119/24), the Court of Justice of the European Union (CJEU) ruled that the non-resident surcharge is incompatible with EU law, in this case with the free movement of workers.
The case concerns a French-resident couple who received Belgian-source income (employment income and income from immovable property) over several tax years and challenged the surcharge before the Belgian courts. The Liège Court of Appeal then referred the matter to the CJEU.
The CJEU finds that, because the municipal surcharge rates vary from one local authority to another in Belgium, applying a fixed federal rate of 7% to non-residents inevitably means that non-residents end up paying more tax than residents of those local authorities with a lower surcharge rate. This constitutes indirect discrimination based on nationality, since non-residents are in practice more likely to be nationals of other EU Member States. The CJEU emphasises that it is not required that non-residents be systematically taxed more heavily. It is sufficient that this is the case in certain situations in order to speak of a restriction on the free movement of workers.
Belgium argued – and the European Commission agreed – that a uniform rate corresponding to the average of all municipal rates was a fair and non-discriminatory approach. The CJEU rejects this argument. It concludes that the Belgian surcharge goes beyond what is necessary to achieve its stated objective and therefore constitutes an unjustified restriction on the free movement of workers.
What is the impact?
The CJEU notes that, as one of the two non-residents in question only received Belgian income from immovable property (and not employment income), it is for the referring court to determine whether the case only falls within the scope of the free movement of workers, or whether it should also be assessed in the light of the freedom of establishment or the free movement of capital. The CJEU clarifies that its ruling, which is based on the free movement of workers, can be applied mutatis mutandis when assessing the possibility of an infringement of other fundamental freedoms.
This means that the ability for non-residents to recover the surcharge is not limited to EU citizens employed in Belgium. Indeed, the reasoning extends to persons able to rely on the freedom of establishment or the freedom to provide services (for income from business activities) or the free movement of capital (for real estate income or income from capital assets and movable goods). Since the free movement of capital also offers protection to nationals of third countries, the scope of the judgment could extend to non-EU citizens whose investments are protected by the freedom of capital.
For non-residents who can rely on one of the fundamental freedoms of EU law, the CJEU ruling opens up concrete avenues for claiming refunds of past paid surcharges, which can mount up to considerable sums, making it worth considering further action.
There are two main legal routes available under Belgian tax law:
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A tax protest can be filed up to one year after receipt of the relevant assessment notice.
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Moreover, a CJEU judgment – including one rendered in response to a reference for a preliminary ruling – qualifies as a "new fact" under Belgian tax law, which revives the possibility of challenging previously settled assessments by requesting ex officio relief. This provides a five-year window, calculated from 1 January of the year in which the tax was assessed. If claimed in 2026, it is possible to apply for ex officio relief for a surcharge levied further to a tax assessment issued as of 1 January 2022 (meaning that even tax (re-)assessments relating to income of 2020 (or even previous years) might be covered provided they are issued after 1 January 2022).
Our tax team is ready to guide you efficiently and effectively through this process and assist you in assessing your individual situation, identifying the tax years for which a recovery application is viable, and filing on your behalf the necessary tax protest or application for ex officio relief.
