The debate on the taxation of capital gains has established itself insistently on the Belgian political scene since 2014 and the sale, by Marc Coucke, of the Pharmaceutical Company Omega Pharma, which will bring it 1.45 billion euros without having to retrocede the slightest penny to the taxman. It was then frequently fueled by institutions such as the International Monetary Fund or the Organization for Economic Cooperation and Development (OECD) which regularly invite Belgium to tax movable capital gains to rebalance the taxation on labor, heavily taxed, and that on capital, rather spared.
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The agreement seems final this time. But he took time to emerge. And, barely the main lines known, he suffered a salvo of criticism. Some believe that the new tax will discourage people to invest their money in the development of the economy. The others judge that it will save “the widest shoulders”. The majority will undoubtedly find in the diversity of these criticisms the proof of having given birth to a balanced agreement. Here are the main lines.
1. What is this tax?
As its name suggests, the capital gains tax will hit the gain that an individual or a company will make the sale of financial assets such as shares (listed companies, as not listed), bonds, participation in an investment fund or cryptocurrency. On the other hand, it will not receive group insurance (pension from the second pillar contracted by companies for their workers) or pension savings products (pillar of the third pillar constituted directly by individuals). Another scenario: children who inherit financial assets after the death of a parent will pay inheritance rights, but should not, in addition, pay a tax on added value. The tax will amount to 10 % of the gain. It will be effective from January 1, 2026 and will only apply to future capital gains. There will therefore be no retroactive effect. The Belgian state hopes to get 500 million euros per year in cruising speed.
2. When and how will it be taken?
The tax will be taken at the time of the transaction. The bank through which the transaction will take place will take care of the levy and pay the amount of this loss to the Belgian tax. Note that it will not transfer this money to the state after each transaction. It will pay all the losses every month. In this way, the State will not know the amounts invested by transaction and by person. In the future, he will not be able to use this measure to establish a draft of fortune tax like the president of the PS, Paul Magnette, recently advocated him in Free.
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3. An annual exemption of 10,000 euros
However, the government wanted to protect small investors, who place their savings, hoping to round their end of the month while feeding the economic engine. This is why each taxpayer will be entitled to an exemption of 10,000 euros per year on the capital gains he will have made. He will therefore only be taxed when his earnings exceed 10,000 euros. This amount will even be indexed by 1,000 euros if in the previous year it has no added value. This indexing can be repeated 5 times. If an investor keeps his shares in his portfolio without selling them for 5 years, he will be exempt from 15,000 euros. In the sixth year, the indexing mechanism for the exemption starts zero again. The idea is to encourage taxpayers to invest for a while. The Minister of Finance, Jan Jambon (N-VA), had proposed an integral exemption for those who keep their actions for at least 10 years. But Vooruit did not want to hear about it. It is therefore a compromise that was chosen.
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4. A softer tax for business owners
The government also wanted to preserve entrepreneurs and not to discourage their audacity creative employment. It should not be that a small employer will be heavily “sanctioned” when at the end of his career, he resells the company he created to a loved one. This is why shareholders holding at least 20 % of a company will benefit from an exemption of up to 1 million euros in capital gains. Progressive taxation will then be applied beyond this amount: 1.25 % on the capital gain between 1 million and 2.5 million, 2.5 % on the capital gain between 2.5 million and 5 million and 5 % on the capital gain between 5 million and 10 million. The rate of 10 % will then apply.
