The European Commission (EC) said on Thursday that it had decided to refer Belgium to the European Union (EU) Court of Justice over tax rules in the Walloon Region.

The tax rules in the Walloon Region are "discriminatory and in breach of EU rules on the free movement of capital," the EC said in a statement on its website.

The legislation "provides for a choice between several share quotations to determine the taxable base for inheritance tax purposes. This provision allows heirs to choose the most favourable for them, usually the lowest," said the EC.

"This choice is however only offered for shares listed on a Belgian stock exchange," said the EC.

"Shares listed on stock exchanges of other EU member states or European Economic Area (EEA) States can only be valued at the stock market price at the time of death without any possible choice between quotations," it added.

The Commission considers that the absence of choice while valuating shares listed on stock markets outside Belgium is discriminatory and restricts the free movement of capital as set out in article 63 of the Treaty on the Functioning of EU.

"In practice this may discourage Belgian residents from investing in foreign shares as their succession might be more heavily taxed," it added. Endi

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