• New tax on securities to replace the annulled tax on securities accounts ?

New tax on securities to replace the annulled tax on securities accounts ?

Bruno Orban, Senior Manager |

21 January 2020

The act of 7 February 2018 introduced a tax on securities accounts at a rate of 0,15%, which came into force on 10 March 2018. From the very beginning, this tax was subject to a lot of criticism due to its discriminatory nature. By means of a ruling of 17 October 2019, the Constitutional Court annulled the law introducing this tax.

Bill concerning a new tax on large fortunes…

There was no doubt, however, that the legislator was working on a new tax targeting large fortunes to replace the annulled tax on securities accounts. This has now been done! A bill “amending various provisions in order to introduce a tax on securities” has been put before the Parliament on January 2020.

This bill aims to introduce a new tax of 0,15% to be paid by natural persons resident in Belgium who own securities and derivative instruments relating to securities with a value of EUR 500,000.00 or more.

 

…taking into account the comments of the Constitution Court

At first sight, this new tax is identical to the old tax on securities accounts. However, it now applies to all types of financial instruments, whether or not they are listed on the stock exchange, and it no longer excludes certain types of securities from its material scope of application.

 

Including securities that are not held on a securities account

A major change is that securities, which are not held in a securities account, are also covered by this new tax. These include, in particular, securities held in a register of registered securities. It should be remembered that the exclusion of these registered securities from the scope of application of the former tax on securities accounts was one of the main reasons for its annulment by the Constitutional Court. Among the new features is also a reduction of EUR 750 in personal income tax in favour of those liable for the tax on securities.  This tax reduction has the effect of exempting the first EUR 500,000.00 from tax.

 

Great similarities with the former regulation

Certain features remain unchanged compared to the former tax, such as the rate of 0,15%, the reference period of twelve successive months starting on 1 October and ending on 30 September, as well as the calculation method of the tax base.

 

Entry into force

This new tax should take effect on 1 March 2020.

We will not fail to keep you informed of the evolution of this bill. 

 

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