Executive summary

On Friday 31 January 2025, the five political parties expected to constitute a new Belgian federal government reached an agreement on their policy for the coming five years. This agreement includes the long-debated capital gains tax for individual shareholders as well as a series of other reforms relevant to private investors.

This Alert outlines the main features of the new capital gains tax for individual shareholders and other relevant areas where changes are expected for private investors.

The government agreement also includes a series of reforms related to corporate income tax, salary taxation and tax procedural measures.

New capital gains tax

The new government agreement introduces a 10% levy on such capital gains. The government agreement refers to a "solidarity contribution" (solidariteitsbijdrage/contribution de solidarité) but this contribution is expected to constitute personal income taxes that are levied based on the reporting of the capital gains in the personal income tax return.

The precise entry-into-force date is not yet available, and the publication of draft legislation is anticipated to help taxpayers and advisors understand the details of this new taxation. Nonetheless, the government agreement reveals a high degree of complexity.

1. Assets covered

Both listed and unlisted shares are covered by the new tax, although stock-quoted shares will in practice be treated differently than shares in privately owned companies, due to the introduction of a significant-interest rules (aanmerkelijk belang regeling/régime de participation importante) (see infra under "Significant-interest rule," below).

The government agreement also explicitly states that the new levy applies to financial assets, including crypto assets. In recent years, the Belgian Ruling Commission had already clarified that gains on crypto assets should be treated the same way as capital gains on shares.

2. Significant-interest rule

Small investors will benefit from an exemption on capital gains up to €10k per year (with an annual indexation). Any capital gain in excess of this amount will be subject to 10% capital gains tax.

For a significant interest of at least 20%, progressive rates will apply.

The progression applicable to significant interests will apply an exemption for capital gains of up to €1m. The taxable base between €1m and €2.5m will be subject to 1.25% capital gains tax; the taxable base between €2.5m and €5m will be subject to 2.5% capital gains tax; the taxable base between €5m and €10m will be subject to 5% capital gains tax; and any capital gain in excess of €10m will be fully taxed at 10%.

Note that this is the latest version of the significant-interest rule according to our information. However, a prior version of the government agreement defined significant interest as a stake of 10% with different progressive rates applicable to the capital gains up to €20m.

3. Exemption of historical capital gains

The text specifies that the solidarity contribution will not apply retroactively, meaning that capital gains accumulating prior to the entry into force of the new regime will remain exempt.

First, as already note, the specific entry-into-force date has not been disclosed. Second, no details have been published on how the built-up capital gain will need to be determined, valued or disclosed This will be relevant largely for shares in privately owned companies for which no stock quotation is available.

4. Deductibility of capital losses

Capital losses will be deductible. The deduction will only apply to capital gains realized under the same category of income within the same year. Capital losses cannot be carried forward. The rules on deductibility of capital losses will therefore only be relevant for investors who realize different trades within the same year, some being successful, some being unsuccessful.

Other announced reforms relevant to private investors

In addition to the new capital gains tax, a series of announced reforms will be relevant to private investors, as described below.

Carried interest: The new government will introduce a specific and competitive tax framework similar to regimes in neighboring countries to stimulate the fund industry in Belgium. This regime will include a maximum tax rate of 30% on movable income, without affecting existing plans. It remains unclear which type of plans will be considered to constitute carried interest and whether the interposition of a corporate vehicle will be amended as well (currently resulting in 15% taxation under the VVPRbis or liquidation regime — i.e., allowing small and medium-sized companies to pay dividends at a reduced withholding rate — referred to below).

Tax on securities accounts: Unlike previous government notes, the government agreement does not include an increase of the 0.15% tax on securities accounts, but the new government will examine how avoidance of this taxation can be tackled.

VVPRbis/liquidation regime: The two regimes will be harmonized, resulting in a three-year waiting period before dividend distributions qualifying for the regime may be made at a combined effective tax rate of 15% (instead of 30%).

Stock exchange tax: This tax will be modernized and simplified to tackle existing issues and create a level playing field for different types of investments in companies and funds. The fund-to-fund provision (dakfondsbepaling/fonds de fonds) will be amended and clarified.

Private Privaks/Pricafs Privées: To encourage venture capital investments, regulatory rules in relation to Private Privaks/Pricafs Privées will be amended to overcome current bottlenecks, such as the limited term of the fund, the number of shareholders, the time to set up the fund and the limited permitted investments. Generally, a broader scope of application can be expected for these items, currently limiting the use of Private Privaks/Pricafs Privées.

Conclusion

The new government agreement contains a number of measures relevant to private investors. Notably the final government agreement maintains the long-debated capital gains tax at 10% or progressive rates in case of a significant shareholding exceeding 20%. Implementation of the tax is still to be defined based on the legislative process, in particular on grandfathering of capital gains built up to date and the entry into force.

Other previously rumored changes have not been upheld, notably an increased tax on securities accounts.

With regard to a series of other reforms relevant to private investors, the information made available is high-level (e.g., for carried interest methodologies and Private Privaks/Pricafs Privées).