In an unfortunate decision, the Brussels Court of Appeals has upheld a decision by a lower court holding that stock option costs charged by a foreign parent company to its Belgian subsidiary cannot be deducted.

Although the decision is unfortunate, it is worth pointing out that many companies do not charge equity award related costs to their Belgian subsidiaries to avoid triggering the very high employer social tax (approx. 35 percent) which can gnerally be avoided where there is no recharge.  These companies have already decided to forego a tax deduction, which means that the new decision will not impact them.