Bond ETFs seem like a straightforward investment choice for the conservative part of your portfolio. You buy them, hold them for a while, and eventually sell them when needed.
Yet in Belgium, selling these investments comes with a catch that many newcomers overlook: the Reynders tax takes 30% of your capital gains. Even worse, determining which investments are affected isn't always clear-cut, leading to potential tax miscalculations.
Let's clear up the confusion about the Reynders tax once and for all. We'll explore which investments fall under this tax, how it's calculated, and how you can properly account for it in your investment strategy.
What is the Reynders tax?
The Reynders tax is applied to the capital gains you earn from investing in bond funds. The tax rate is 30% on the total capital gain. A previous Belgian ex-Minister of Finance, Didier Reynders, gave it its name.
Which investments are liable for the Reynders tax?
Accumulating funds and ETFs that invest in bonds
The Reynders tax applies to accumulating funds that invest in bonds, as well as mixed funds with at least 10% invested in bonds. So an ETF that invests only 5% of its assets in bonds is not liable for the Reynders tax.
An example of a bond ETF is Xtrackers II Global Government Bond ETF (DBZB), that we selected as one of the top bond ETFs for Belgians. The series of Vanguard LifeStrategy ETFs are examples of mixed funds that invest in both stocks and bonds.
Most distributing funds are still liable for the Reynders tax
The Reynders tax applies only to accumulating funds. Distributing funds, which pay out interests instead of reinvesting them, are exempt. But, there's a catch. In most cases, you'll still have to pay the Reynders tax for distributing funds and ETFs.
In theory, distributing funds are not subject to the Reynders tax. But this is only the case if the fund's rules say that all movable income goes to the investor. This happens rarely though. So in practice, you will still pay the Reynders tax when selling a distributing bond fund.
For example, consider the ETF iShares Global Government Bond USD Dist. It has the ISIN code IE00B3F81K65. But, the prospectus lacks the relevant information. You still have to pay the Reynders tax when investing in this fund.
Also be careful with synthetic ETFs
Another caveat are synthetic ETFs, because they can invest in bonds even if the underlying index they're tracking is not a bond index. Take for example the Invesco Bloomberg Commodity ETF, with ISIN code IE00BD6FTQ80. It tracks the Bloomberg Commodity Index, which follows the prices of futures contracts on physical commodities like oil and gas. The Reynders tax does not apply to commodities, so you would think that the ETF is exempt from the tax. But the ETF replicates the index synthetically. It doesn't buy the underlying futures contracts on commodities, but instead holds a basket of US Treasury Bills and swap contracts to reproduce the returns of the index. And US Treasury Bills are bonds. So unfortunately, even if the ETF tracks a commodity index, the Reynders tax still applies because the fund holds bonds to implement the index.
What about funds and ETFs that invest only in stocks?
Good news: the Reynders tax does not apply for stock ETFs. It's only for bond funds. This essentially means that Belgium does not tax capital gains on stocks.
However, this will change in 2026 when the new capital gains tax on all financial assets is introduced.
What about individual bonds?
Individual bonds are not liable for the Reynders tax. This means that if you buy a bond below par and sell it later at a higher price, you will not be taxed on the profit. Note that you will need to pay a 30% tax on the interest that the bond pays out, similar to how dividends are taxed for stocks.
How to calculate the Reynders tax?
For now, let's only consider funds that invest just in bonds. The basic calculation is easy: the Reynders tax is 30% of your capital gains. So if you bought a fund at €100 and sell it for €150, you owe €15 to the state (30% of the €50 profit).
It gets a bit more complicated when you made purchases at different times. Suppose the following scenario:
- On January 1, you buy 50 shares of a bond ETF at €10 per share.
- On February 1, you buy an additional 100 shares at €12 per share.
- On March 1, you sell 90 shares at €15 per share.
On which shares is the Reynders tax calculated? Formally, each share in an ETF has a unique identifier. To illustrate, assume that the ETF has 1,000 shares outstanding in total. And on January 1, you purchased shares 850 to 899. And on February 1, you bought shares 900 to 999. According to the law, you must then calculate the Reynders tax on the exact shares that you sold. So if you sold shares 900 to 989, you would pay the Reynders tax over a €3 per share capital gain. But if you also sold some shares in the 850 to 899 range, you will have to pay some Reynders tax on a €5 capital gain.
You may not always know exactly which shares within the fund you bought and sold. For instance, the broker may not give that information to you. In that case, it's most logical to apply the first-in-first-order principle (FIFO). FIFO sells the oldest shares first. In our example:
- The first 50 shares sold are from the January purchase. The capital gain for these shares is (€15 - €10) x 50 = €250.
- The next 40 shares sold are from the February purchase. The capital gain for these shares is (€15 - €12) x 40 = €120.
The total capital gain is €370, so you owe €111 in Reynders tax (30% of €370).
What about mixed funds and ETFs?
Calculating the Reynders tax for mixed funds that invest in both stocks and bonds is more complex than for pure bond funds. Let's look at a practical example.
Imagine you bought 100 shares of a mixed fund for €25 per share in January. The fund invests 70% in stocks and 30% in bonds. You sell these shares in December for €35 each.
Your total capital gain is €10 per share (€35 - €25), or €1,000 total. However, the Reynders tax only applies to the bond portion. So you'd calculate:
- Bond portion of your gain: €1,000 × 30% = €300
- Reynders tax due: €300 × 30% = €90
The challenge is that fund companies don't always provide clear information about what percentage of your gain comes from bonds versus stocks. When this information isn't available through TIS (Taxable Income per Share) values, your broker might apply the "asset test" method - essentially using the average percentage of bonds held by the fund during your ownership period.
In some cases, if no clear information is available, your broker might unfairly tax 100% of your gain. This is why it's crucial to check your settlement notes carefully when selling mixed funds.
Because of these complications, the taxman does not make it easy for Belgian investors to invest in mixed ETFs, especially since most of them are foreign and do not do the additional work to support the calculation of the Reynders tax. This is why certain mixed funds like the excellent Vanguard LifeStrategy funds, are fiscally not interesting for Belgians. The Reynders tax namely has to be paid on the entire capital gain, and not just the bonds part.
Which brokers declare the Reynders tax for you?
Fortunately, Belgian brokers take care of calculating, paying and declaring the Reynders tax for you. That's a significant administrative burden off your back! But Belgian brokers are also among the most expensive on the market. This is why foreign brokers like DEGIRO have become so popular. Bad news though: foreign brokers do not handle the Reynders tax. They shift the task and fiscal risk onto you. It's definitely a trade-off to be aware of when choosing a broker.
Below is an overview of the brokers available to Belgians, and if they handle the Reynders tax for you.
Albeit important, the declaration of the Reynders tax isn't the only concern when choosing a broker. Cost, safety and ease of use are also important criteria. Read our guide of best brokers in Belgium to help you choose a broker.
Common mistakes and how to avoid them
When dealing with the Reynders tax, several common mistakes can cost you money. Here's what to watch out for:
- Keep detailed records: If you transfer funds between brokers, bring your original purchase documents with you. Without them, some brokers will assume you bought your funds at a different value, which could significantly increase your taxable gain.
- Understand when the tax applies: Some investors think all distributing funds escape the Reynders tax. This isn't true. Only funds whose legal documents specifically state that all income must be distributed annually are exempt. Most distributing funds are still subject to the tax.
- Be wary of certain funds: Some funds that follow commodity indices (like oil or gold trackers) can surprisingly be subject to the Reynders tax if they hold bonds to replicate the index synthetically. Always check with your broker before buying.
- Don't assume foreign brokers handle it correctly: Foreign brokers typically don't handle the Reynders tax for you. You'll need to calculate and declare it yourself, which increases the risk of errors. Consider whether the cost savings are worth the additional complexity.
How to declare the Reynders tax in your tax form in 2025
Fortunately, the declaration is a lot easier than the calculation! You simply need to add the capital gains coming from bonds in code 1444 of the box VII (Income from capital and movable property) of the tax declaration. Be careful, do not put the amount of the Reynders tax itself, but the whole capital gain. You'll end up paying 30% of the amount that you declare in taxes. So suppose you bought a bond ETF at €200 and sold at €300. You made a €100 profit. You would fill in €100 in code 1444 (and not the Reynders tax of €30).
The hassle of managing your taxes through a broker
Navigating the complexities of the Reynders tax is one the many challenges you face when managing your own portfolio of investments through a broker.
When you have thousands of funds 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. There are unfortunately other taxes besides the Reynders tax, you need to learn how to use your broker, and know 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's also possible that you are confident managing your investments with a broker, but you have friends and family members who are not. Yet, if you're like us, you believe that good investing is such a powerful tool to better one's financial life, that it should be available to everyone.
This is where Curvo comes in.
No tax headaches when investing with Curvo
Curvo was built to take away all the complexities of investing in index funds and ETFs. Our mission is to improve the financial well-being of our generation through the power of passive investing. No need to search through thousands of ETFs or scour wikis in order to understand how to select a fund. Through Curvo:
- Invest in a portfolio tailored to you: Based on a questionnaire, the right mix of funds is selected that corresponds to your goals and appetite for risk.
- Invest safely: Your investments are overseen by the Dutch regulator (AFM).
- Set up a savings plan: Put your savings on autopilot. Choose an amount and it will automatically be invested every single month.
- All your money is invested: In contrast with the majority of brokers, your investments will work with fractional shares. This means that all your money is put to work. There will never be cash sitting on your account doing nothing.
- No entry or exit fees: There are no transaction fees, entry or withdrawal fees.
Learn more about how Curvo works.
How Curvo compares to investing through a broker
You can perfectly manage your own portfolio of investments through a broker. However, if:
- you're worried of making a mistake when investing
- you don't want to handle the taxes
- you don't want to spend time choosing a broker
- you don't want to spend time making the trades
- you don't want to figure out a rebalancing strategy and execute on it
- you want fractional shares
- you want peace of mind that your investments are taken care of
...then you're welcome to try Curvo! You can learn more on the differences with doing investments yourself through a broker.
What about the new capital gains tax?
Since 2025, there have been important developments regarding the Reynders tax. As part of the government agreement, Belgium is planning to introduce a new capital gains tax on all financial assets starting from 1 January 2026. This means the Reynders tax, which currently only applies to bond funds, will be replaced by a broader tax that covers stocks, crypto, and other investments too.
The new tax will be set at 10% and will apply to almost all capital gains on financial assets, not just bonds. This is a significant change for Belgian investors. If you're currently concerned about the Reynders tax, you'll need to start thinking about this broader tax system from next year.
However, the exact details are still being finalised and could change before implementation. We recommend staying informed through official government channels and consulting with a tax advisor if you're making significant investment decisions in 2025.
For your 2024 tax return (which you'll file in 2025), the current Reynders tax rules still apply as described in this article.
Conclusion
Understanding the Reynders tax is crucial if you're investing in bonds or mixed funds in Belgium. This 30% tax on bond-related capital gains can significantly impact your returns, especially if you're unaware of which investments it applies to. While pure stock ETFs are currently exempt, this will change in 2026 with the introduction of the new capital gains tax.
Managing these tax considerations can be time-consuming and complex, particularly when calculating the taxable portion of mixed funds. Belgian brokers handle this administration for you, but at a higher cost than foreign alternatives that leave you to deal with the paperwork yourself.
If navigating these complexities feels overwhelming, you might consider simplified investment solutions like Curvo that handle tax considerations for you. Whatever route you choose, being informed about the Reynders tax helps you make smarter investment decisions and avoid unpleasant tax surprises when selling your investments.
We've done our best to provide accurate info, but keep in mind we're not fiscal lawyers. Your situation might be different, so it's up to you to double-check or ask for professional help.