After years of attracting investors without a capital gains tax on shares, this is about to change. According to recent reports, N-VA, MR, Les Engagés, Vooruit, and CD&V have reached an agreement to introduce a capital gains tax. In Bart De Wever's coalition agreement it is stated that the tax would be set at 10%, with an exemption for the first 10,000 EUR of gains.
Capital Gains Tax on Shares: What's at Stake?
The proposed capital gains tax would require investors to pay a 10% tax on profits made from the sale of, among other things, shares and bonds. This is a significant move, as Belgium currently does not impose a general tax on capital gains when investments are considered part of normal prudent investor behavior. However, the tax would come with certain nuances. For example, costs related to generating those gains, such as stock exchange taxes and securities taxes, would be deductible.
As it currently stands, the capital gains tax would only apply to gains accumulated from the moment the tax is implemented. In other words, historical gains would be exempt.
According to Bart De Wever's coalition agreement a distinction would be made between investors holding a "substantial interest" of at least 10% in a company. For these investors, capital gains would be subject to a progressive tax system with lower rates. In this case, the first 1 million EUR would be exempt. Above 1 million EUR, the tax rates would be as follows:
Gains between 1 million EUR and 2.5 million EUR: 1.25%
Gains between 2.5 million EUR and 5 million EUR: 2.5%
Gains between 5 million EUR and 10 million EUR: 5%
Gains above 10 million EUR: 10%
This measure is a concession to the MR party, but it offers little relief for ordinary investors.
For investors without a substantial interest in a company, the tax rate would be set at 10%, with an exemption on the first 10,000 EUR of annual capital gains. In other words, if the annual realized gains do not exceed 10,000 EUR, no capital gains tax would be due (for now).
It is also foreseen that losses (within this category of income) will be deductible within the same year, without any possibility of carryforward.
It is important to note that the annual exemption threshold of 10,000 EUR will be indexed annually.
Finally, the coalition agreement states that the measures adopted during this legislative term will take effect in 2026. In other words, we are granted one more year without the capital gains tax.
According to Bart De Wever's coalition agreement, this capital gains tax would explicitly apply to cryptocurrencies as well.
What about speculative gains?
There is still no clarity regarding "speculative capital gains." It is highly likely that these will continue to be taxed as miscellaneous income at a rate of 33% (plus municipal surcharges).
This is particularly relevant for investors in, among other things, shares and cryptocurrencies. For the tax authorities, the capital gains realized by investors are often a point of contention. The tax authorities regularly attempt to classify realized gains on shares or cryptocurrencies as taxable miscellaneous income.
As a result, the importance of a proper tax analysis to determine whether realized gains qualify as taxable miscellaneous income or as "normal management of private wealth" (which is exempt) has significantly increased. Share and crypto investors will, in the future, be required to declare their realized gains in their tax returns. These gains will, in any case, be subject to taxation.
It is very likely that the tax authorities will conduct audits in the future, targeting investors' tax returns. They will verify whether the declared capital gains were correctly reported and investigate whether the gains should be classified as miscellaneous income, which is taxable at the higher rate of 33% (plus municipal surcharges).
In short
According to the latest developments, a capital gains tax will be introduced in any case. De Tijd reports that for ordinary investors, this tax would be set at 10%, while for investors holding a "substantial interest," a progressive tax system would be applied. The key question, of course, is how exactly this system will be structured. Additionally, there is uncertainty about how long the tax rate will remain "low."
A relevant example is the withholding tax, which initially stood at "only" 10% but was gradually increased over the years, ultimately reaching 30%. It is not unthinkable that if the Belgian state faces new budgetary deficits, this 10% capital gains tax rate could also be increased.
The new De Wever I government marks a shift in Belgium's fiscal landscape, emphasizing the taxation of capital gains and the "encouragement" of domestic investments.
Christophe Romero
Senne Verholle
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