The new Belgian federal government, led by Bart De Wever, took the constitutional oath before the King on Monday, February 3rd.
Numerous new fiscal measures are planned. Their concrete content and scope will still need to be clarified through working documents and draft laws that are still in progress. However, here is an overview based on recent reports in the press and various specialized websites.
Important observation: Real estate taxation, particularly taxes on rental income and capital gains on private real estate, will (fortunately) remain unchanged. This makes Belgium an attractive country for real estate investments.
Introduction of a Capital Gains Tax
A notable new feature in the fiscal landscape is the introduction of a 10% capital gains tax on the sale of financial assets, such as stocks, bonds, and cryptocurrencies. An exemption is provided for the first 10,000 euros of capital gains, a threshold that will be indexed annually.
For participations exceeding 20% in a company, a progressive tax rate will apply, but with an exemption up to 1 million euros, after which the rate rises to 10%. Most SME owners will likely remain unaffected due to these exemption thresholds.
The impact of this (new) capital gains tax will also remain relatively limited, especially since losses can now be offset and previously realized capital gains will remain untouched.
It remains to be seen whether (and how) capital gains realized on non-listed shares (e.g., shares in a personal business) should be determined, let alone taxed.
Tax Regularization and Fraud Prevention
The government is reintroducing a tax regularization system (which was supposedly “definitively” abolished last time...), allowing taxpayers to declare previously undeclared income with a penalty rate of 30% for non-prescribed capital and 45% for prescribed capital, unless good faith can be demonstrated. It will be interesting to see whether this new initiative will address the countless disputes from the past.
Reintroducing the possibility of regularization is, in any case, a good move, especially when (as often happens) assets have been inherited or gifted, and heirs are unsure how their predecessors managed everything.
Additionally, 300 extra personnel will be recruited to combat tax and social fraud, including in the Special Tax Inspectorate and the judicial police. Regarding cryptocurrency fraud, one can hope that this measure will provide more manpower, as this service currently consists of only a handful of people.
Corporate Tax Adjustments
Several changes are planned for corporate taxation:
- Higher minimum remuneration for company directors: Directors will need to grant themselves a higher minimum salary to qualify for certain tax benefits. Given the high social and fiscal burdens on labour, it remains to be seen whether this measure will be truly beneficial.
- Exit tax for emigrating legal entities: Modelled after foreign examples, this measure will introduce a tax on the capital gains of assets when a company relocates abroad.
Changes in VAT and Excise Duties
The following measures have been announced concerning VAT and excise duties:
- VAT on combustion boilers: The VAT rate on combustion boilers will be increased to 21%, regardless of the age of the property.
- Extension of the 6% VAT rate for demolition and reconstruction: This favourable measure for property developers is being extended to stimulate urban renewal.
- Increase in the annual tax on securities accounts: The tax rate will rise from 0.15% to 0.25%.
- Flight tax: A uniform flight tax of 5 euros will be introduced for all flights, regardless of distance.
- Higher excise duties on tobacco and e-cigarettes: Excise duties on tobacco products and electronic cigarettes will be increased as part of public health policies.
Wage Tax Reforms
To encourage and reward employment, the following changes will be implemented:
- Stock options for employees: A solidarity contribution of 5% will be introduced for employees receiving stock options, as compensation for social security.
As always, Vanbelle Law Boutique closely follows the latest trends and developments well before new ideas become legislative texts, ensuring that you are prepared for what is to come.
