Belgium has long been a tax haven for investors. Unlike many European countries, we didn't have to pay taxes on the profits we made from selling stocks or ETFs.
But that's about to change. The new Belgian government plans to introduce a 10% capital gains tax on financial assets in 2025.
Before you panic: there's a yearly exemption of €10,000, and the tax only applies to future gains. Here's what you need to know about the new tax and how it affects your ETF investments.
What is the capital gains tax?
In January 2025, the new Belgian government reached an agreement. As part of the coalition agreement, it will introduce a capital gains tax of 10% on financial assets, including ETFs but also for example crypto assets. They name the new tax a "solidarity contribution". Previously, Belgium did not have a capital gains tax on stocks and equity ETFs.
Fortunately, the government will provide an exemption of €10,000 per year. The exempted amount will be indexed annually, meaning that it will rise with inflation.
How is the tax calculated?
Only capital gains accrued from the time the tax is introduced will be taxed. So if you invested in an ETF 10 years ago, only the recent price matters for calculating the capital gains tax. Historical capital gains are exempt.
Also, you can deduce losses. So if you made a €10,000 profit on the sale of one ETF, but a €20,000 loss on the sale of another, the result is a net loss so you won't be taxed. However, you won't be able to carry losses forward to future years.
When will they introduce it
It's unknown. The tax first needs to be formalised into law. We will then also know the full details.
Declaring and paying the tax
It's expected that Belgian brokers will automatically withhold the capital gains tax for you, like they do for the other taxes like the transaction tax or the Reynders tax. However, it's unclear how they will handle the €10,000 yearly exemption.
We don't expect foreign brokers will help you with the declaration and payment of the capital gains tax.
The impact for Belgian ETF investors
A tax on capital gains is naturally negative for ETF investors. However, it affects all types of financial assets, so it will also affect those who invest in individual stocks and crypto assets.
Secondly, when you reach your financial goal, it will be smart to slowly sell parts of your investments each year rather than sell everything in one go. This way, you can make use of the yearly €10,000 exemption. Also, as the exemption is indexed, it will increase each year.
The capital gains tax incentivises a buy-and-hold strategy. After all, you aren't taxed until you sell your assets. And trading less often usually leads to better investment returns anyway.
But to draw any strong conclusions, we need to wait until the details are fleshed out in the law.
Our conclusion
The introduction of a capital gains tax in Belgium marks a significant change. While a 10% tax might seem daunting at first, the €10,000 yearly exemption provides a reasonable buffer for many small investors. The key takeaways? Only new gains will be taxed, losses can offset gains, and a patient, long-term investment strategy becomes even more attractive.
If you're feeling overwhelmed by all these tax considerations, you're not alone. That's why we built Curvo to handle the complexities of investing for you, including tax optimisation. Want to see how we can help? Learn how Curvo works and start investing the smart way.
The information presented here is up-to-date at the time of writing. But it changes frequently so it might be outdated when you read this. Check at the top when this article was last updated, and please remember to do your own research!