With effect from 1 January 2017, Belgian tax payers holding direct assets overseas such as shares, bonds and funds (including ISAs in the UK), are obliged to comply with new tax reporting requirements in Belgium and may be subject to Belgian stock exchange tax when buying and selling such investments.
Belgian Tax on Stock Exchange Transactions (BSET) has been applied to certain financial assets held in Belgium for a number of years. The scope of the tax has now been widened to include equivalent assets held outside Belgium via overseas financial intermediaries such as foreign banks, custodians, investment platforms or discretionary managers. Additionally, the maximum tax limits payable per transaction have increased.
|Underlying stock||Tax rate||Tax Limit Per Transaction|
|Bonds||0,09% (on purchase & sale)||1.300 EUR|
|Shares||0,27% (on purchase & sale)||1.600 EUR|
|Shares in capitalisation funds||1,32% (on sale only)||4.000 EUR|
The deadline for reporting and paying the tax due is 30 days after the end of the month in which the transaction takes place. Where the overseas financial intermediary does not automatically withhold the tax and pay it to the Belgian authorities, the responsibility falls to the individual. In this case the deadline is extended to 60 days.
EU officials and those with expat status are exempt, although they will need to comply with the relevant tax reporting requirements of their respective country of tax residency.
The first reporting deadline has been delayed to 30 June 2017 (so for individuals who report this will include transactions from 1 January to 30 April 2017).
After this date fines will be imposed for late reporting with payment of tax of €25 per week increasing to €50 per week from January 2018.
Other taxes which apply to directly held funds, shares or bonds (including ISAs for those who have been UK tax resident) are:
- 30% on dividend / interest income whether paid out or reinvested (increased from 27% in January 2017).
- 30% tax on the capital gain on sale of accumulating funds holding more than 25% of assets in fixed interest securities.
For many Belgian residents it may be more attractive to hold their investments within an insurance bond (known as Branch 23).
Whilst a one-off Belgian Insurance Premium Tax of 2% is payable at outset, there is no direct tax liability in Belgium on any income or gain arising in the bond, nor is any tax payable in Belgium upon encashment or withdrawals.
The above is based on current Belgian taxation, law and practice and our current interpretation and understanding of these, all of which may be subject to change.