Belgium's flat 7% surcharge on non-residents fails Article 45 TFEU

Belgium charged non-residents a flat 7% supplement in place of a local tax that some Belgian municipalities never levy. On 12 March 2026 the Court of Justice held that Article 45 TFEU does not allow it.

The design looked defensible. Belgian municipalities and agglomerations levy a supplementary tax on residents at rates they set themselves, and some set none. Non-residents pay no municipal tax, so Belgium put a State surcharge on their Belgian income instead: 6% to tax year 2005, 7% after. The stated purpose was equal contribution to public services.

The Court took Belgium at its word on that purpose and drew the consequence. If the surcharge exists to place residents and non-residents in the same position, the two are comparable, and comparability is what opens Article 45. A flat national rate then delivers the opposite: a French resident with Belgian income can carry a heavier burden than a Belgian resident in a municipality that charges nothing (C-119/24, DK and JO v État belge, Sixth Chamber, on a Liège reference).

Follow the money. The surcharge was drafted as a stand-in for a local charge, and a stand-in is measured against the thing it replaces. That thing is set municipality by municipality and in some places is zero. One national figure cannot track it. Belgium's objective survived as legitimate; the instrument failed as unsuitable and disproportionate.

The pattern travels. A levy that hits non-residents at a fixed national rate while residents face a locally variable equivalent carries the same defect. Cross-border employees with income taxed in a second Member State have reason to read the composition of their assessments while the years are open.