Passive holding companies in the tax authorities’ sights: activate your holding!
A holding company that owns shares in one or more subsidiaries is an attractive vehicle for spreading risk, acquisitions or family planning.
A Belgian holding company also has plenty of tax advantages. For instance, the holding company can have the profits of its subsidiary or subsidiaries flow up tax-free. It can sell its shareholdings with a taxfree capital gain. The shares of a holding company can also be gifted at the reduced gift tax rate of 3%.
To enjoy these benefits, the tax rules must be strictly observed, otherwise the structure risks falling foul of the tax anti-abuse rules. In recent years the tax authorities have been actively checking this. This has resulted in important European case law in the form of the so-called Danish cases, but also in recent
Belgian case law.
The problem of ‘passive’ holding companies
With ‘passive’ holding companies the tax benefits are refused where the structure appears artificial. A lack of economic substance is decisive in this respect.
The tax authorities are scrutinising holding companies that have too little economic activity ever more critically. A recent judgment of the Mons Court of Appeal makes this clear once again (judgment of 21 January 2026).
A holding company was incorporated in the context of a family reorganisation. In doing so, certain shareholders were bought out of an already existing holding company. Shortly after incorporation, dividends were streamed up to the holding company to finance this purchase. The tax authorities regarded the construction as artificial and refused the exemption of the dividends in the holding company. This results in heavy economic double taxation. After all, the profit had already been taxed in the subsidiary but is taxed again in the holding company.
The Mons Court of Appeal followed the tax authorities’ reasoning. From the facts the court inferred that the holding company had no economic substance.
In another case, the Leuven court refused the exemption to a Belgian company that had received a dividend from a subsidiary in the United Kingdom
(judgment of 6 June 2025).
The Court of First Instance in Bruges, too, refused the application of a withholding exemption because the holding company was said to have been an
artificial construction (judgment of 21 October 2024).
Belgian or Dutch holding companies
Many entrepreneurs active in Belgium and the Netherlands structure their activities through a classic holding structure: a Belgian holding company
that holds the shares in a Dutch operating company, or vice versa.
Tax-efficient? For a long time that was the starting point. But recent developments make this much less self-evident for cross-border holding companies, especially where they act solely as a tax vehicle to optimise cross-border dividend flows.
Because in the Netherlands, too, the tax authorities (Belastingdienst) and the courts have become stricter. The Dutch Supreme Court (Hoge Raad)
confirms that the Dutch tax authorities can refuse the withholding exemption for dividend tax where there is abuse or an artificial structure. In concrete
terms this means that dividends from a Dutch company to a Belgian holding company may nevertheless be taxed with Dutch dividend tax.
And on the Belgian side, the Belgian tax authorities could reject the exemption on the dividends received. A structure that was perfectly defensible years ago may today be fiscally vulnerable.
Activeer uw holding
Evaluate the group structure!
Entrepreneurs would be well advised to evaluate their current group structures in order to identify tax risks, and must exercise sufficient care when setting up holding structures, paying attention to the economic rationale. Be sure to avoid conduit structures without any substantive involvement of the holding company.
How do you activate a holding company?
This can be done in various ways. For instance, management or support services can be centralised in the holding company. Depending on the activity within the holding company, the necessary staff and investments are provided — think of an office, a company car, suppliers, …
An ‘active’ holding company is also important for gift tax
With an ‘active’ holding company, the full value of the shares qualifies for the reduced gift tax rate of 3%. Since 1 January 2026 there is an exception to this where the holding company owns residential real estate.
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