The Belgian authorities require you to declare your foreign account. But it's unclear how you do that exactly, and foreign brokers don't provide clear instructions. Good news: we wrote down everything you need to do to declare your foreign account to the Belgian authorities. So you can sleep at night!
Why do you need to declare your foreign account?
The Belgian government requires you to declare all your foreign accounts to understand what profits you made from foreign accounts, like interests on a savings account, or any dividends through stocks. As part of its anti-money laundering legislation, the Belgian government wants to gain better insight into the foreign assets of its residents. You need to report your foreign account to the National Bank of Belgium (NBB), and mention it every year in your tax declaration.
What happens if you don't declare your foreign account?
You risk a fine ranging from €50 to €1,250, as well as a tax increase of 10% to 200%. Indeed, failure to disclose the existence of your foreign account is an offence under Article 307 §1/1(a) of the Income Tax Code 1992 (ITC 92). It's best not to risk a sanction!
And they will know if you have a foreign account! Over a hundred countries have joined the Common Reporting Standards (CRS), which manage the international exchange of banking information for tax purposes. So in most cases, the tax authorities automatically receive detailed information about your foreign accounts and the income they generate for you.
How to declare your foreign account
You need to complete two tasks:
- Declare your foreign account to the National Bank of Belgium, at their Central Point of Contact (CPC).
- Mention your foreign account every year in your tax declaration.
We created step-by-step guides for:
- Declaring your DEGIRO account
- Declaring your Trade Republic account
- Declaring your MEXEM account
- Declaring your BUX account
- Declaring your LYNX account
- Closing your foreign account
When do I have to declare my foreign account?
It's important you declare your foreign account to the NBB as soon as you've opened your account. Also make sure to do it before your file your tax declaration for the year. For example, if you started investing in November 2022, you'll want to declare your account before you file your taxes in 2023 for the year 2022.
What brokers do I have to declare my foreign account for?
Belgian brokers provide a domestic account, so there's no need to declare any foreign account. But you do need to declare your accounts with foreign brokers:
The need to declare a foreign account isn't the only consideration when choosing a broker. Safety, ease of use and price are also important criteria. You can learn about these in our in-depth broker comparison.
The challenges of investing through a broker
Declaring your foreign account is one of the annoying administrative tasks when investing through a foreign broker. But it's one of the many challenges of managing your own investments through a broker.
When you have thousands of stocks and ETFs to choose from, establishing a well-balanced investment portfolio that matches your financial goals is tricky. You need to choose the underlying indices, build your portfolio as the right mix of indices that suit you and your goals, and choose the ETFs that track these indices. But that's not all. Understanding the tax system is also important, as well as learning how to use your broker, or knowing when to rebalance your portfolio.
You may not have the time, motivation, or simply interest in finance to climb over the learning curve. Or you'd rather spend time on things more important to you than the management of your investments.
It takes time
If you invest every month, you need to send money to your brokerage account, calculate how many shares of each ETF to buy, send through the orders, and track the evolution of your portfolio. From our own experience, this process is fun the first few months when everything is new, but it becomes a drag afterwards.
Transaction costs make brokers costly for monthly investing
It makes sense for most to invest monthly because it follows the rhythm of your income, and you buy irrespective of the markets being low or high. But the business model of brokers is not adapted because they charge a fee per transaction. When investing a smaller amount every month, the fee can be prohibitively expensive and have too great of a negative impact on your return. Having more funds in your portfolio only worsens the problem.
It requires discipline
It's one thing to set up your portfolio and make your first purchases. It's another to maintain the habit over years, especially when markets are down. This requires a necessary discipline if you want to ensure success in the long term.
Brokers want you to trade
Brokers earn money per trade. They earn a lot more from customers who trade often. So as an index investor with a buy-and-hold strategy, you're a bad customer for them. Their incentives are conflicting with yours. And the apps of many brokers are indeed set up to incentivise trading. For example, they show the biggest moving stocks of the last 24 hours on the home screen, hoping that you'll buy the hot stock that went up a lot. Obviously, this is a terrible reason to invest in a stock.
The easier way: Curvo
When you choose a broker, you then have to figure out what to buy, when to buy, understand the tax implications of your decisions, rebalance your investments and make sure they stay in line with your goals and risk tolerance.
We realised the difficulties of investing through brokers like DEGIRO. So our approach is different and that's why we created Curvo: the right investment decisions are made for you so you don't have to worry, where we rely on NNEK, a Dutch investment firm supervised by the Dutch AFM.
We are convinced index investing through ETFs are the best way for most people to invest and grow their savings. Rather than picking individual stocks such as Amazon or Tesla, index funds are a way to buy the whole market, across all sectors and regions of the world. Essentially, you own a small portion of thousands of companies throughout the world. Instead of betting on a particular company, you are placing a bet on the global economy.
Why index investing works
There are many benefits to index investing:
- Low-cost. One of the problems associated with active investing are the high fees. Index investors pay lower fees because index funds are very cheap to run.
- Diversified. One of the goals of index investing is to diversify as much as possible. Through diversification across many countries and sectors, you eliminate unnecessary risk.
- Rooted in the real economy. Most index funds invest either in stocks or bonds. Those are backed by real companies, with real factories, employees, intellectual property, and so on. This is unlike, for example, the crypto space, where the value of a currency or token is mostly determined by its potential rather than by concrete applications.
- Tax-efficient. In Belgium, we don't pay any taxes on profits from investments in stocks, making index investing particularly tax-efficient.
- It just works. Long-term index investing has worked in the past. And there's no reason it shouldn't work in the future. Just take the global index MSCI World as an example, which is composed of 1,500 companies across 23 countries. It has delivered an average yearly return of 10.6% since 1979.
Curvo solves all the complexities of good investing
Rather than having to pick the right stocks or ETFs among the thousands available through these brokers, through Curvo you invest in a portfolio that is tailored to you and your goals. The portfolios are managed by NNEK, a Dutch investment firm licensed by the Dutch regulator (AFM). They are composed of globally diversified index funds, meaning you earn a piece of the growth of the global economy, and they're best suited to make the most of your savings long term.
We believe that investing is an important tool for our generation to improve our financial well-being and to prepare for our future. We built Curvo to fulfil that vision, by making good investing easy and accessible to all.
Diversified portfolio built for you
We understand that it's hard to build the portfolio that's right for you, so creating an account starts with answering a questionnaire on your investment goals and your appetite for risk. You’ll then be assigned the best portfolio of index funds that matches your goals and risk tolerance. Each portfolio is globally diversified and invests in over 7,500 companies.
Sustainability at the core
Your investments focus on one guiding principle: don’t invest in companies that are considered destructive to the planet. This means that sectors like non-renewable energy, vice products, weapons and controversial companies are excluded.
Built for monthly investing
You can set up a monthly savings plan where your selected amount is automatically debited from your bank account and invested in your portfolio at the start of each month. This way, it's easy to adopt the best saving habits. Also, Curvo does not charge any transaction fees. And your investments with NNEK, through the Curvo application, support fractional shares, meaning all your money is invested. So Curvo is ideal for adopting a dollar-cost averaging strategy through monthly investing.
No learning curve
Our goal is to solve all the complexities of index investing through a broker. This means you don't have to worry about:
- Understanding the tax system. The portfolios are already tax-optimised.
- Choosing a broker. There are many options available and it can be hard to pick the one that you feel most comfortable with.
- Rebalancing. It is made sure that your portfolio is kept in balance.
- Calculating and executing your orders every month. It's all set up for you.
- Keeping discipline. We help you stay the course!
Discover how Curvo works.
Summary
You now know why you need to declare your foreign account to the Belgian authorities. It requires two steps: declare your account to the National Bank of Belgium, and declare it every year on your tax declaration. We also walked you through declaring your DEGIRO account to the Belgian authorities.
Managing your own investment portfolio can be cumbersome when using a broker like DEGIRO. If you still want to invest but you're looking for something easier, do take a closer look at Curvo.
What you should do now
- Figure out if you have declared your foreign accounts to the National Bank of Belgium. If you haven't, make sure to do so following the steps in this article.
- Declare your foreign accounts in your next tax return.
- If you're looking for an easier option for investing, explore Curvo.
Questions you may have
How do I declare my foreign account if I'm a minor?
If you're under 18, both your parents have to declare your account. Learn more at the National Bank of Belgium.
Which foreign accounts do I need to declare?
You must declare any type of account opened with a bank, exchange, credit or savings institution established abroad: checking accounts, savings accounts and investment accounts. You must declare these accounts even if they only existed for a very short time during the year in question. You also need to declare that you've closed them.
You don't need to declare your PayPal or Google Pay account unless you hold money there or use it for business purposes.
How do I declare my other foreign accounts?
You should follow the same process as we did with declaring your DEGIRO account, but tailor it to the specific institution. Brokers whose account you have to declare to the National Bank of Belgium include BUX, DEGIRO, eToro, Interactive Brokers, LYNX, MEXEM, Revolut, Shares and Trade Republic.
Where can I learn more about declaring my foreign accounts?
You can learn more on declaring your foreign accounts on the official Belgian Federal Public Service on Finance's website: Dutch or French.
This information is written with the best of our knowledge. Note though that we are not fiscal lawyers, and your situation may differ from what is assumed here. You’re responsible to do your own research or seek external advice.