The Belgian exit tax on financial assets is on the way!

Important side note: This proposal has not yet been laid down in a legal text, consequently no certainty can be given at this stage as to the correctness and/or completeness of the conditions.
The Belgian federal government is currently negotiating the introduction of a capital gains tax on “financial assets”, in hands of individuals and non-profit entities. 

In this context, unrealized capital gains on “financial assets” would be taxed in case of transfer of the tax residence outside Belgium. This new exit tax should be considered as a significant change in Belgian tax law. 

The details of this tax would be as follows.
 

1.    Basic regime


As announced in the government agreement, there will be a general tax of 10% on capital gains of financial assets, with an exemption for historical capital gains from the entry into force of the tax (foreseen on 1st January 2026). Capital losses relating to this category of income will be deductible in the same tax year, but could not be carried forward.

Financial assets include listed and unlisted shares, bonds, money market instruments, derivatives, units of investment funds and ETFs, crypto-assets and currencies, including gold investment as well as life-insurance contracts and capitalization contracts. Commodities (other than investment gold), pension funds and extra legal pension contracts would not be subject to the new capital gain tax.

A basic exemption of €10,000 (to be indexed) will be foreseen to protect small investors. The unused portion of the basic exemption may be carried forward to the next taxable period, but for a maximum carry-forward amount of €1,000 per year and without the total amount of the exemption ever exceeding €15,000.

In the case of major holding of at least 20%, the exemption will rise to €1,000,000 (maximum amount over a five year period) and taxation will then be progressive:
  • Between €1,000,000 and €2,500,000: 1.25%;
  • Between €2,500,000 and €5,000,000: 2.50%.
  • Between €5,000,000 and €10,000,000: 5%.
  • Over €10,000,000: 10%.


2.    Exit tax

  • The new tax will also apply on unrealized capital gains when the taxpayer transfers his/her tax residence outside Belgium. Two situations must be distinguished here: 

    • The taxpayer transfers his/her tax residence to an EU Member State, an EEA Member State or a State with which Belgium has signed a double taxation agreement providing for the exchange of information and mutual assistance in recovery. In this scenario, the taxpayer will automatically benefit from a deferral of payment of the exit tax, which will lapse in the event of a sale of the financial assets on which the exit tax was calculated or in the event of a subsequent transfer of the taxpayer's tax residence outside one of the countries mentioned above.  

    • The taxpayer transfers his/her tax residence to a State not referred to in the previous point. In this scenario, the taxpayer may opt for deferral of payment of the exit tax, if (s)he provides sufficient guarantee for payment of the amount due (e.g. via a bank guarantee). This deferral of payment will lapse in the event of a sale of the financial assets on which the exit tax was calculated. 


In the event of a deferral of payment, the taxpayer must submit an annual certificate to the authorities confirming that the conditions for deferral of payment continue to be met. 

The obligation to pay the exit tax will expire in any event two years after the taxpayer has transferred his/her tax residence outside Belgium (or in the event of a return to Belgium during this period). 


3.    Impact on the Belgian intermediaries


As a rule, the new capital gains tax will be levied by financial intermediaries located in Belgium, in the same way as the Belgian withholding tax on dividend or interest income. Additional reporting formalities are expected to be provided by Belgian and foreign financial intermediaries to help taxpayers complying with this tax.    

We will, of course, keep you informed as soon as the details of this new tax regime have been finalized.

Do you need more information, concrete advice or support? Contact Bruno Orban or Nicolas Thémelin.