New Belgian capital gains tax: importance in a cross-border context

This article originally appeared in Dutch in the journal Grensoverschijdend Werken.

The Belgian government has announced a general capital gains tax for all financial assets. (1*) This would come into force on January 1, 2026. The era of tax-free capital gains seems to be coming to an end in Belgium. In certain cases, this also has an impact on tax advice in a cross-border context. After an outline explanation of the core of the new regulation, there will be a discussion of the possible impact at international level and of some possible actions to mitigate the tax consequences.

Application area

The new legislation will apply to personal income tax (income tax for residents) and to legal entities tax (non-profit associations, foundations). Non-residents get away with it for now. In the Belgian corporate income tax, other regulations apply that are not discussed in this framework.

The purpose of the new tax is to provide for a levy on capital gains from certain transactions that are considered as so-called ‘normal asset management’. The tax regimes already in place in Belgium on professional capital gains and on capital gains from non-‘normal asset management’ remain in force (2*). It is only after it is clear that there is normal asset management that the taxpayer must take the consequences of the new law into account. It aims to tax capital gains from financial assets. The starting point here is that only capital gains actually realised are subject to taxation. There must be a fee in exchange for the transfer of financial assets. Virtual capital gains remain untaxed until realization. Gifts and inheritances of financial assets are also excluded from taxation. The contribution in kind of shares (exchange of shares) benefits from an exemption.

Financial assets within the meaning of the new legislation include all possible securities, listed or unlisted (including shares), crypto, precious metals and currencies, as well as revenues from life insurance policies. In principle, it makes no difference for the purposes of the tax whether it concerns domestic or foreign assets.

Tax rate

The general tax rate will be 10%. However, the taxpayer is entitled to an annual exemption of in principle € 10,000 (3*). Any capital losses can be set off against capital gains, but cannot be carried back or forward to a previous or subsequent year. The tax is paid either by withholding by a financial institution or by the annual return. A tax return is not mandatory if a full withholding has been made, but would be necessary to be able to apply the aforementioned exemption and set-off with capital losses.

Internal capital gains

For so-called internal capital gains, which are already often assessed as abnormal asset management and are therefore taxable, the new legislation provides for a separate rate of 33%. Internal capital gains exist if the transferor of shares or profit participation certificates, whether or not together with close family members (spouse, descendants, ascendants and collateral relatives up to and including the second degree and those of the spouse) exercises direct or indirect control over the transferee.

Substantial interest in shares

The Belgian government provides, perhaps somewhat surprisingly, a more favourable regime for capital gains on substantial interest (SI) shares. There is an SI if the transferor disposes of at least 20% of the shares of a company upon transfer. For the purpose of calculating this limit, the taxpayer may not take into account shares held by close relatives.

In this case, the 10% rate only applies to capital gains in excess of €10,000,000.

Up to € 10,000,000 the following rates apply:

• € 0 – € 2,500,000: 1.25%
• € 2,500,000 – € 5,000,000: 2.5%
• € 5,000,000 – € 10,000,000: 5%

In addition, the transferor is entitled to an exemption amounting to the first tranche of €1,000,000 of capital gains, which he can use spread over a period of five years.

Higher rate for certain international transactions in respect of SI

For some time now, the current Belgian legislation has included a special tax rate for certain capital gains realised on SI shares of Belgian companies. This regulation, with a different definition of SI, is deleted and reintroduced in an adapted form in the new draft.

In particular, a tax rate of 16.5% applies to the transfer of SI shares to a legal entity established outside the European Economic Area (EEA). The aforementioned graduated rates do not apply, but the exemption up to € 1,000,000 does.

Value fixation

The capital gain is – simply put – the difference between acquisition price and sale price. In this case, the taxpayer will not be allowed to charge either purchase costs or sales costs.

However, the new scheme will not take effect until 1 January 2026. The intention is to also tax only the capital gains from that date. Therefore, no tax is due for the value accrued up to 31 December 2025. The taxpayer can prove the value as at 31 December 2025 for listed securities by referring to the share price on that day. For unlisted securities, this proof is more complicated. To this end, the Belgian authorities refer to a “menu” from which the highest value can be chosen:

• The value that emerges from transactions between completely independent parties concluded in 2025;
• The value that emerges from an option agreement enforceable as of 1 January 2026;
• For shares or equivalent instruments (e.g. depositary receipts): a value equal to equity plus four times the EBITDA as shown in the annual accounts closed at 31 December 2025 at the latest;
• Contrary to the last valuation, the value may also be evidenced by a valuation report by an independent certified accountant or auditor, drawn up by 31 December 2027 at the latest.

In the event that the acquisition value of the financial asset is higher than the value as at 31 December 2025, it may be used to calculate the capital gain, but no later than 31 December 2030. The higher acquisition value may not be used to calculate a capital loss.

Non-residents

As mentioned, the new tax will apply to personal income tax and legal entities tax. It does not apply to non-residents of Belgium.

However, at present, non-residents can be taxable under Belgian tax law on capital gains realised on shares of a Belgian company, if the transaction does not qualify as normal asset management or if the current existing special regime for substantial shareholdings is applied. As a result of the application of the double taxation treaties, taxation of such capital gains will generally be allocated to the country of residence, as a result of which Belgium will have to waive taxation. On the other hand, this is not the case if the transferor resides in a country with which Belgium has not concluded a double taxation treaty. However, it is the intention of the Belgian government to remove the taxation option on the sale of Belgian shares in all cases outside a professional activity from 1 January 2026.

Emigration and immigration

As a general rule, the capital gains on financial assets are only taxed in the event of realisation. There is one important exception to this: emigration. Previous drafts stated that a gift to a non-resident would also lead to taxation, but this was deleted in a later version.

The unrealised capital gains on all financial assets are therefore taxable as soon as the taxpayer is no longer treated as a tax resident in Belgium. A deferral of payment would apply to this exit tax:

• In the event of a move within the EEA or to a country with which Belgium has concluded a double taxation treaty that provides for the mutual exchange of information and recovery assistance, an automatic deferral of payment of the tax applies for two years;
• In the event of a move to another country, the taxpayer may request a deferral of payment for two years, provided that he provides a security to that effect. This regime also applies to relocation from an EEA or treaty country to a third country within two years of emigrating from Belgium.

In the event of a transfer of financial assets during this two-year period, the deferral of payment lapses to that extent. After emigration, the taxpayer will have to demonstrate by means of a special certificate that the conditions for postponement are met.

However, at the end of the two-year period, the deferral of payment is final. If the taxpayer moves back to Belgium within this period without having transferred the assets in question, the exit tax will also lapse. As a counterpart to the exit tax, immigrants benefit from a “step up” for their financial assets upon arrival in Belgium. This “step up” only applies to the application of the new capital gains tax.

The announced exit tax for financial assets is subject to comments from the Council of State in the context of the legislative preparation, in particular because a different exit tax has been introduced since 29 July 2025: the fiction of liquidation applies to the transfer of a company’s registered office from Belgium to another country. This fiction, which has existed for some time at the level of corporate tax, now also affects the level of the shareholder. In other words, the shareholder is deemed to have received a liquidation dividend that is generally taxable at 30%. If the shareholder himself moves, he would also have to be taxed in the context of the new capital gains tax. The question is, among other things, whether this is in accordance with the fundamental European freedoms.

Points of attention and action for international cases

Although the new capital gains tax mainly concerns Belgian legislation, it also has certain consequences for cross-border situations.

Emigration before 31 December 2025?

For example, the entry into force on 1 January 2026 may give rise to an earlier emigration. It is true that the new legislation provides for a deferral of taxation and the taxpayer is relieved of the tax claim after only two years. In addition, in the event of a move shortly after 1 January 2026, the taxable amount will probably be nil or limited as a result of the value fixation as of 31 December 2025. Less than avoiding taxation, an early move can relieve the taxpayer of a number of compliance measures.

As mentioned, since 29 July 2025, taxpayers have already had to take into account a liquidation fiction when a company moves its registered office from Belgium. The resulting levy can be 30%. In those cases, it is important to think well in advance about structural adjustments in order to reduce or avoid taxation as much as possible. Moreover, the risk of double taxation for the shareholder lurks around the corner. After all, in many cases, the country of emigration will not take into account the Belgian liquidation fiction and will (re)subject subsequent dividend payments to local taxation.

Timing of the sale of shares before December 31, 2025?

A similar reasoning applies to a proposed sale of shares or other financial assets. In the event of a transfer before 1 January 2026, the taxpayer does not yet have to take the new tax regime into account. From 1 January 2026, the new legislation with the associated obligation to declare will apply.

In view of the value fixation as of 31 December 2025, the taxation itself will often be nil or limited. However, the taxpayer must implement the necessary compliance measures. In addition, from 1 January 2026, advisors will have a special notification obligation for transfers of SI shares. Whereas a number of transactions have often remained under the radar of the tax authorities to date, this will no longer be the case from 1 January 2026. This is especially important for situations where there is doubt as to whether or not a transfer falls under ‘normal asset management’. Such doubtful cases now receive explicit tax attention.

Great importance of the value fixation

The value fixation mentioned is very important in the new regulation. For unlisted shares, the value as of 31 December 2025 can be determined in various ways. In many cases, however, it will be useful to draw up a valuation report in order to be able to ‘use’ the highest possible amount in the calculation of a later realised capital gain. Of course, this also applies to the interests of Belgian residents in foreign companies. This can be a direct interest or an indirect interest through a certain company structure.

The texts stipulate that the valuation report may be drawn up by an independent certified accountant or auditor. This refers to Belgian professionals. It is unclear whether a foreign counterpart would be allowed to edit such a report for the valuation of companies not established in Belgium. To avoid discussions, the taxpayer will contact a Belgian expert who will then have to count on cooperation with a foreign colleague. There is time for this report until December 31, 2027. It goes without saying that figures from all entities involved must be available in good time to meet the deadline of 31 December 2027. In any case, it is best to prepare the valuation as soon as possible (e.g. valuation of real estate) because it is predictable that the time pressure for the valuation experts will be very great. This is all the more true now that the expert must be independent, which means that he does not yet know the company to be valued.

Take into account the SI limit

In the new scheme, the enormous tax difference is also noticeable depending on whether the limit of 20% SI shareholding is reached or not:

• A SI shareholder who acquires a capital gain of €1,000,000 does not owe tax, while the same capital gain for a shareholder who owned, for example, 19% of the shares, leads to a capital gains tax levy of €99,000;
• With a capital gain of €10,000,000, the SI shareholder pays €331,250, the non-SI shareholder pays €999,000 capital gains tax.

Restructuring involving shareholders residing in Belgium should take this limit into account as far as possible. This applies, among other things, to shifts in the context of estate planning and to a phased sale of shares.

Avoid internal capital gains

It is clear that a tax on internal capital gains is avoidable, given the higher tax rate of 33%. Certain family transfers where the transferor retains (shared) control lead to this higher tax. The same may be the case for share buybacks held on the balance sheet by the buying company.

Avoid selling shares outside the EEA

Capital gains on SI shares that are larger than one million euros are taxable at a higher rate of 16.5% if it concerns the transfer of shares in a Belgian company to a legal entity outside the EEA. The low tiered rates are therefore lost, unless the buyer is established in the EEA. The current Belgian acquisition practice normally takes this difference into account because a somewhat similar provision is also included in the current legislation.

Conclusion

In a nutshell: anyone who deals with Belgian residents in international practice would do well to respond proactively to the upcoming legislation on capital gains tax. Most attention will be paid to the 20% equity limit and an appropriate valuation of shares as of 31 December 2025 to minimise negative tax consequences.

 

Author: Gert De Greeve, Partner Van Havermaet

 

(1*) At the time of writing this article, no draft law has yet been submitted to parliament. This article is based on texts of a preliminary draft and information published in the press. Changes to the final text of the law are therefore possible.

(2*) Capital gains from non-normal asset management are taxable at 33%, plus additional municipal tax.

(3*) In the event of non-use up to a maximum of €1,000 per year, this can be carried over to the next year up to max. €15,000.