The European Commission has officially asked Belgium to amend its treatment of notional interest deductions. Current Belgian rules provide that a notional interest deduction is granted for Belgian real estate and permanent establishments, while no deduction is granted for foreign real estate and permanent establishments.
The Commission considers that this is contrary to EU rules as laid down in the Treaty on the Functioning of the European Union. The freedom of establishment (Articles 49 and 54 TFEU) prohibits the exclusion of foreign permanent establishments, and the free movement of capital of (Article 63 TFEU) prohibits the exclusion of foreign real estate. The Commission does not challenge the notional interest deduction as such, only its discriminatory application.
The request takes the form of a reasoned opinion and if the rules are not brought into compliance within two months, the Commission may refer the matter to the Court of Justice of the European Union.
For further details see here.