As part of the ongoing tax negotiations, major reforms are being considered, which are likely to have a significant impact on investors.
1. Financial capital gains tax
A general tax of 5% on capital gains on financial instruments, including crypto-assets, is expected to come into force soon. This measure constitutes a significant change in the Belgian tax landscape, which until now has been known for exempting capital gains in the context of "normal" asset management.
This tax would not apply retroactively, thus guaranteeing an exemption for all historical capital gains realised before its entry into force. In addition, capital losses on this type of asset would be deductible in the year in which they were realised, although there is no provision for carrying the loss forward to subsequent years. The tax would be accompanied by a corrective mechanism that takes inflation into account.
To protect the most modest investors, a basic exemption of EUR 6,000 is envisaged, although this amount remains subject to negotiation. For taxpayers with a substantial shareholding in companies not listed on the stock exchange (less than 5% shareholding), a higher basic exemption, of up to EUR 5 million, will be introduced.
2. Tax on securities accounts
At the same time, the annual tax on securities accounts will be increased. The rate applied will increase from 0.15% to 0.25% for accounts with assets exceeding EUR 1 million. This measure is part of a desire to ensure the wealthiest contribute more, while also addressing repeated criticism around tax evasion associated with this tax.
3. Other measures
The "super-note" also proposes other reforms, such as:
- Gradually increasing the tax-exempt portion of personal income tax for income from work (and not from unemployment, for example) and the abolition of the special social security contribution scheme, CSSS.
- Setting a "plane" tax of EUR 5 per person, per ticket, regardless of the destination.
- Modifying a withholding tax rate, applicable under the copyright tax regime, from 15% to 20% and, at the same time, extending the regime to digital professions.
- Potential reform affecting "definitively taxed income" (DTI).
4. Overall impact and outlook
The introduction of a general tax of 5% on capital gains is a major change for the Belgian tax system. This measure reflects a desire to tax the wealthiest more while protecting small investors but applying the measure could create challenges given its complexity.
The increase in the tax on securities accounts on the one hand, and the increase in the flat-rate portion exempt from personal income tax on the other, also seem to constitute a further step towards taxing assets and at the same time reducing taxation on labour.
The other measures are political compromises and an attempt to balance budgets.
In preparing for these developments, we invite you to consult our experts to assess their impact on your investments and tax obligations.
