Under Belgian law, up to 95% of dividends received on qualifying shares can be deducted from the receiving company's net taxable income. However, this deduction (the so-called dividends received deduction) is only available if, and to the extent that, the receiving company has a net taxable profit. In other words, the deduction does not apply if it would turn a net profit into a net loss for tax purposes or increase the recipient's net losses.

Today the European Court of Justice ruled that this restriction on the deduction is incompatible with EU law, namely the Parent-Subsidiary Directive (Case 138/07, Belgium v. Cobelfret NV)."