Tag: Tax

Capital Gains Tax on Financial Assets: FPS Finance Unveils Its Interpretation of the Reform

Several months after the entry into force of the new capital gains tax on financial assets, the Belgian Federal Public Service Finance (FPS Finance) published Circular No. 2026/C/74 of 22 July 2026.

With more than 100 pages of commentary and examples, this is the first comprehensive administrative position on the reform. While the Act of 6 April 2026 established the legal framework, the Circular now clarifies how the tax authorities intend to interpret and apply these new rules.

For investors, entrepreneurs and their advisers, this administrative guidance is essential reading. 

But which clarifications truly deserve your attention?

Practice now complements the law

The circular does more than restate the statutory provisions. It provides practical clarification on several key concepts, illustrates their application through numerous examples, and establishes the reference framework on which the tax authorities will rely during future tax audits.

Coexistence with the general regime for miscellaneous income

The circular begins by confirming that the new tax coexists with the existing miscellaneous income regime: any transaction exceeding the scope of normal private asset management or considered speculative remains taxable at 33% under Article 90, 1° of the Belgian Income Tax Code 1992 (ITC 92). The taxpayer is the owner or bare owner of the transferred assets, never the usufructuary—a distinction that is particularly significant in estate planning.

A particularly broad definition of financial assets

The circular confirms that the concept of “financial assets” is not limited to shares and bonds. It also includes ETFs, ETNs, crypto-assets, units in collective investment undertakings, and interests in simple partnerships. Conversely, certain payment instruments remain outside the scope of the regime.

This clarification confirms that the reform extends far beyond traditional investment portfolios.

Examples of internal capital gains

The circular sheds light on this issue by describing several practical cases and examples. For instance, where parents sell the shares of their company to a holding company owned by their children, in which the parents themselves are not shareholders, the specific regime does not apply. However, if the parents subsequently transfer the balance of their current account to their children, the tax authorities may recharacterise the transaction as an internal capital gain under the general anti-abuse provision of Article 344, §1 ITC 92. Conversely, where a private equity fund exercises joint control, Article 90, 9°, a) does not apply because the shareholder no longer exercises control “alone or together with close family members.”

Substantial Shareholdings: Long-Awaited Clarifications

FPS Finance also provides several important clarifications regarding the regime applicable to substantial shareholdings.

In particular, the Circular confirms that the 20% threshold is assessed solely at the level of the transferor, irrespective of the shareholdings held by family members. It also clarifies that profit certificates, options and warrants are not taken into account when determining this threshold, and illustrates various situations involving usufruct, bare ownership and successive transfers.

These examples will help provide greater legal certainty for transactions involving family-owned businesses.

The EUR 1 million exemption: a mechanism finally illustrated

Another particularly useful point concerns the operation of the EUR 1 million exemption applicable to substantial shareholdings.

The circular confirms that this exemption operates as a genuine “backpack” mechanism: the available exemption amount is assessed over a rolling period of five taxable periods and is gradually restored over time. Several numerical examples finally make its practical implications easier to understand.

For shareholders considering a disposal, these clarifications could influence the timing of certain transactions.

Reporting obligation: key koints and clarifications

For internal capital gains and substantial shareholdings, withholding tax is not collected by intermediaries, as they are not in a position to determine the amount of the capital gain or correctly withhold the tax. The tax is therefore assessed through the taxpayer’s income tax return.

For this reason, the legislation introduced a reporting obligation for intermediaries involved in such transactions. This obligation enables the tax authorities to verify whether any capital gain has been properly declared. Since intermediaries are not always able to determine whether a transaction actually gives rise to a taxable capital gain, the reporting obligation is linked to the transaction itself. Reporting becomes mandatory as soon as the transaction has been effectively executed.

The circular provides numerous clarifications, including the timing of the reporting obligation, the meaning of the term “person involved,” the required connection with Belgium, situations involving multiple intermediaries, the interaction with professional secrecy, and the content of the report itself.

Exit Tax: particular attention to departures from Belgium

The Circular also devotes particular attention to the new exit tax mechanism. It specifies the situations in which a transfer of tax residence outside Belgium may trigger taxation of unrealised capital gains on certain financial assets, while also clarifying the calculation methods and the deferral mechanisms provided for by law.

 

At a time when the international mobility of entrepreneurs and investors continues to increase, these clarifications highlight the importance of anticipating the tax consequences of a change of tax residence.

What this means for you

The publication of Circular No. 2026/C/74 marks a new milestone in the implementation of the reform.

If you are an investor, entrepreneur or business executive, this circular is a valuable tool to help anticipate the tax consequences of your transactions, secure your decisions and reduce the risks associated with future tax audits.

At Tax Consult, we closely monitor these developments in order to assist you in analysing your investments, restructurings and succession planning projects in light of this new administrative guidance.

Are you wondering how this reform may affect your situation? Do not hesitate to contact our team. We would be delighted to discuss it with you.

Are you a MNE subject to Pillar 2?

What is it about?

Multinational enterprise groups (MNE Groups) subject to Pillar 2, introduced by the law of 19 December 2023, are now subject to a new mandatory notification requirement. MNE Groups must now be registered with the Crossroads Bank for Enterprises (CBE) separately, meaning that a specific number will be attributed to the group. This registration will be different from the specific Belgian entities’ numbers. 

When does it need to be filed?

This specific registration obligation has been organized by the Royal Decree of 15 May 2024 and the notification must be filed with the Belgian Tax Authorities by one of the following dates, whichever is the latest:

  • Within 30 days following the start of the financial reporting year for which the MNE group enters the scope of Pillar 2;
  • Within 45 days following the publication of the Royal Decree of 15 May 2024 in the Moniteur belge / Belgische Staatsblad. The Royal Decree having been published on 29 May 2024, it means that, as for the current period, this date is set for the 13 July 2024.

Who must do that?

The notification must be made:

  • Where a single ultimate parent entity is established in Belgium: by that single ultimate parent entity;
  • Where several ultimate parent entities are established in Belgium: by the ultimate parent entity designated as the authorized representative;
  • Where there is no ultimate parent entity, and only one constituent entity is established in Belgium: by that single constituent entity;
  • Where there is no ultimate parent entity, and several constituent entities are established in Belgium: by the constituent entity designated as authorized representative.

Please also note that MNE Groups having chosen to opt in for the safe harbor rules must also comply to this registration obligation.

What should be gathered?

If you fall within the requirements of this decree, rather extensive information must be gathered and communicated to the tax authorities such as:

  • General group information, such as group name, fiscal year, address etc.;
  • Information on the type of consolidated financial statements;
  • Detailed information on the ownership structure, including the entities that are (an) ultimate parent entity/ies (UPE), intermediate parent entity/ies (IPE), partially-owned parent entity/ies (POPE) and their subsidiaries;
  • Information on the group point of contact.

If the notification form mentions all necessary information, the FPS Finance will register the MNE group with the CBE. The group’s company number will then be sent by e-mail to the entity that notified the group.

It is essential that you comply with those new tax regulations and that you gather the right information to submit your notification form before it’s too late.

Did you know you have to submit your rent as a professional expense for tax deduction?

Tax deduction for rents

A professional expense?

What is it about?

The law of 28 December 2023 (on various tax provisions) introduced a new reporting requirement for tenants who wish to deduct their rent as a professional expense and tightened the conditions for deductibility of the latter.

Two issues appeared

On one hand, the tax authorities apparently had difficulties detecting cases where tenants used the property for their profession. On the other hand, landlords sometimes were deceived by their tenants.

It was indeed not inconceivable for a tenant to use the property for their professional
activity and deduct (even partially) the rent as a professional expense – without the
tenant being aware of it and even though the lease contract prohibited it – resulting in
heavier taxation for the landlord.

Consequently, the landlord was then taxed based on the actual rents received and no
longer on the indexed cadastral income, increased by 40%.

The landlord then had no choice but to file a legal recourse to recover the additional tax
burden due to the tenant’s fault. A procedure often tedious and laborious, which was
anything but beneficial for the relationship between the tenant and the landlord, and
which did not prevent the tax from being due in the meantime.

Watch out for the prohibition of deduction!

If this new declaration is not respected, the tenant will not be able to deduct the rent paid as professional expenses under Article 53, 33° of the CIR 92. The penalty is therefore severe for tenants who do not comply with this new obligation.

When will you have to comply?

The new measure regarding the conditions of deductibility of rents as professional expenses comes into effect from the 2024 tax year. Rents paid in 2023 relating to the declaration to be submitted during this year 2024 are therefore subject to the new provision.

The new legislative amendment to the “VVPRbis” regime

On January 21, the Belgian government voted a new amendment to the “VVPRbis” regime.

The regime allows small companies, incorporated as from 1 July 2013, to distribute a dividend at a preferential withholding tax rate of 20% (as from the second accounting year) or 15% (as from the third accounting year).

One of the conditions of this regime is that, on the day of the distribution of the dividend, the subscribed capital is fully paid up. Companies without minimum capital were (previously) excluded from the regime. It was assumed that the shareholder(s) had paid up the entirety of the subscribed capital. Therefore, although from a corporate law point of view, the capital of a limited liability company only had to be paid up to up the amount of 6.200 or 12.400 EUR, depending on whether there were one or two shareholders in the company; from a tax point of view, the capital had to be fully paid up, with a minimum of 18,600 euro, at the time of the payment of the dividend.

The entry into force of the CSA, had changed the deal for the SPRL (now transformed into SRL). Since 1st  May 2019, SRL are no longer required to have a minimum capital. At the same time, the provision excluding companies without minimum capital from the “VVPRbis” regime was removed.

Some SPRL – whose capital had not yet been fully paid up and which were being transformed into a SRL – therefore proceeded to a reduction of their equity capital by cancelling the payment of subscribed but not paid-up capital in order to be able to benefit from the reduced withholding tax rate on distributed dividends without having to receive additional funds from their shareholders.

Unfortunately, the legislator intervened. As a result of this new legislative amendment, the contribution initially subscribed must be fully paid up to the amount historically subscribed in order to benefit from the “VVPRbis” regime. Companies that have reduced their capital by waiving the payment of the contribution are therefore excluded from the “VVPRbis” regime.

However, a transitional regime was put in place for companies having performed a capital reduction between 1st May 2019 and 15th December 2021. These companies will be able to proceed, before 31st  December 2022, to a capital increase, which will have the effect of increasing the amount of paid-up capital up to the amount initially subscribed before the waiving of payment.

These measures will apply to dividends distributed as of January 2022.

If you have any further questions, we invite you to contact us at the following e-mail address: info@taxconsult.be or to contact one of our managers directly, who will provide you with advice tailored to your situation.

A new annual tax on securities accounts as from February 26, 2021!

Following the annulment of the former tax on securities accounts by the Constitutional Court (judgment of 17 October 2019), a draft law “introducing an annual tax on securities accounts” was submitted to the Chamber early this year. The draft has since been approved at first reading in the chamber committee.

The new annual tax on securities accounts will be levied on the securities accounts themselves and not on the holder of the securities account. A securities account is defined as an account on which financial instruments can be credited and debited.

The new tax will apply to securities accounts held both in Belgium and abroad, when the account holder is a Belgian resident. The tax is not limited to individuals residing in Belgium, but also applies to companies and legal persons (subject to corporate tax) established in Belgium.

The tax is also applicable to securities accounts held by non-Belgian residents (individuals and companies or legal entities) when the securities account is held in Belgium.  However, since the new tax is a wealth tax, Belgian non-residents can avoid the application of the new tax to their Belgian securities accounts if the applicable double tax treaty grants the right to tax the wealth to their jurisdiction of residence (e.g. the Netherlands).

All financial securities and cash balances held in the securities account are covered, including derivatives (such as trackers, turbos, etc.).

The new tax is due when the average value of assets held on the securities account during the reference period exceeds EUR 1,000,000.00. The reference period starts in principle on 1 October and ends on 30 September of the following year. The reference period may be shorter if a securities account is closed or if the account holder moves from Belgium to a state with which Belgium has concluded a double tax treaty, which assigns the right to tax the assets to the state of residence.

The threshold is determined on the basis of the average value of the assets on the securities account at four reference points during the reference period (31 December, 31 March, 30 June and 30 September).

If the securities account is held by a Belgian intermediary, the latter must withhold the tax due and file the return. Belgian intermediaries must fulfil these obligations no later than 20 December (after the end of the reference period ending on 30 September).

In all other cases, it is the account holder’s responsibility to file the return and pay the tax due. If there is more than one account holder, all account holders are jointly and severally liable. Each account holder can file the tax return on behalf of all the account holders.

Do not hesitate to contact the person in charge of your file or to mail at info@taxconsult.be for more information.

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