The Law of 14 December 2005 on the abolition of bearer securities provided (a.o.) in the obligation to convert the bearer securities into dematerialized securities or registered securities, by no later than 31 December 2013. This obligation was part of the campaign against abuse, financial crime, terrorist financing, money laundering practices and tax fraud.

By Law of 28 December 2011, the Belgian Government introduced a tax on the conversion of bearer securities into dematerialized securities or registered securities. This meant that the holders of the bearer securities who had not yet converted their securities before the end of 2011 where automatically subject to this tax.

The rate of the tax was fixed at 1% in the case of a conversion effected in 2012 and on 2% in the case of a conversion effected in 2013 and was calculated on the value of the securities on the day of deposit. This tax was paid by the professional intermediaries where the bearer securities are registered in a securities account following their deposit by the holder or by the issuing companies where the securities are deposited for the purposes of their conversion into registered securities.

In its decision of 9 October 2014, The European Court of Justice ruled that Article 5(2)(a) of Directive 2008/7 - although not expressly mentioning the conversion of stocks - must be interpreted as meaning that the prohibition of subjecting the issue of stocks to indirect tax, in any form whatsoever, precludes a tax on the conversion of already issued bearer stocks into dematerialised securities or registered securities. The Court further also ruled that Article 6(1) of Directive 2008/7, providing an exception to the non-imposition rule (and allowing Member States to charge a duty on the transfer of securities), is to be strictly interpreted, and is therefore not applicable in the case of a tax on the conversion of bearer stocks.

In other words, the Court clearly stated that the Belgian tax on the conversion of bearer securities is incompatible with the applicable EU-legislation.

Taxpayers, therefore, are entitled to claim repayment of this tax.