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Less than three months after the publication of the Arizona government agreement, a first draft on the new 10% capital gains tax has been prepared. We have outlined hereafter the main features. Note that this draft legislation still needs to be formalized and is hence subject to change.
The proposed scope is larger and will create a level playing field for different financial assets.
Besides a specific regime for significant investments of at least 20%, there will also be a long-term capital gains tax exemption for shares held for more than ten years.
So called “internal capital gains” will remain subject to 33% taxation. A specific anti-abuse rule is foreseen in this respect. Also, in order to prevent the avoidance of the capital gains tax through a relocation, a specific exit taxation will apply if a Belgian tax resident shareholder relocates outside Belgium.
The new taxation rules for capital gains are expected to enter into force as of 1 January 2026 and historic capital gains until 31 December 2025 will be grandfathered. The value on 31 December 2025 quals the company’s equity plus four times EBITDA.
The rules will apply to both individual investors and legal entities subject to legal entities taxation (e.g. non-profit organisations and foundations).
1. Assets covered – level playing fields for financial assets
The capital gains taxation will apply to transfers against consideration of financial assets. Financial assets include all types of financial instruments (shares, bonds etc.), certain life insurance products, crypto assets and valuta.
The intention is to create a level playing field between different categories of financial assets and the new rule will therefore also result in the removal of the so-called Reynders tax applicable to capital gains realized on certain debt funds.
It is further intended to reduce the annual tax on certain life insurance products from 2% to 0,7% in line with the stock exchange tax applicable to the sale of listed shares.
2. Significant interest rule
Small investors will benefit from an exemption on capital gains up to €10.000 per year (with an annual indexation). Any capital gain in excess of such amount will be subject to 10% capital gains tax.
For shareholders with a significant interest of at least 20%, progressive rates will apply ranging between 1,25% and 10%. The first million of capital gain realized will be exempt.
The significant interest will be assessed over a period of 10 years prior to the realization of the capital gain. The threshold will be met if the selling shareholder has reached the minimum participation at any point during such period alone or together with relatives until the 4th degree.
3. Specific anti-abuse rule for internal capital gains
A specific anti-abuse rule will provide for a taxation at 33% of so-called internal capital gains whereby shares are sold to a self-controlled vehicle.
4. Long-term capital gains tax exemption
Long-term capital gains, realized after completion of a ten-year holding period, will benefit from a capital gains tax exemption. This exemption only applies to shareholders which cannot qualify for the significant interest rule and for sales which are not targeted by the aforementioned specific anti-abuse rule.
5. Exemption of historical capital gains
The text specifies that that historical capital gains will remain exempt. For sales after 1 January 2026, this means that the value of the financial asset will be considered on 31 December 2025.
The value of shares on 31 December 2025 equals the company’s equity plus four times EBITDA of the last financial year prior to 1 January 2026. Taxpayers apply a different value provided that a supportive valuation is prepared by a statutory auditor or certified accountant prior to 31 December 2026.
Also, if the effective acquisition value of the financial asset exceeds the value on 31 December 2025, the taxpayer will need to provide evidence in this respect.
6. Deductibility of capital losses
Capital losses will be deductible. The deduction will only apply to capital gains realized on the same category of financial assets and within the same year. Capital losses cannot be carried forward. This rule will only be relevant for investors who realize different trades with respect to the same category of financial assets within the same year.
7. Exit taxation
Latent capital gains will be taxed upon a taxpayers relocation outside Belgium. This anti-abuse measure seeks to prevent that taxpayers relocate outside Belgium in order to avoid capital gains tax. The rules also target certain transfers of financial assets by a Belgian tax resident investor to a non-resident.