Arizona's new Capital Gains tax: final details disclosed

On 30 June 2025, the Arizona coalition successfully reached a consensus regarding the new capital gains tax. While an official draft law is yet to be released, details have been disclosed on social media. On 1 July 2025, during the Finance Commission session in parliament, the Minister of Finance also provided further information related to the new tax measures.

Below are the key differences between the final agreed version and the earlier versions (read our previous Tax alert). 

The range of financial assets covered is as extensive as originally outlined. The tax applies to Belgian resident individuals and legal entities that are not liable for corporate income tax. Entities eligible to receive gifts that qualify for tax reductions will be exempt.

The specific regime for significant shareholdings of at least 20% is maintained, but the long-term capital gains tax exemption for shares held for more than ten years, has been removed.

Capital gains will continue to be taxed at 33% when realized outside the normal management of the private estate. The reintroduction of this subjective test represents an important change compared to previous announcements.

The rules apply as of 1 January 2026 and historic capital gains until 31 December 2025 remain grandfathered. 
 

1. Targeted financial assets 

The capital gains taxation will apply to transfers against consideration of financial assets. 

Financial assets include: 

• All types of financial instruments (shares, bonds, certificates, warrants, units of funds, derivatives etc.) as defined by the Law of 2 August 2002 regarding the supervision of the financial sector and the financial services;
• Certain life insurance products (branch 21, 22, 23, 26, 44) and similar insurance products marketed by foreign insurers;
• Crypto assets covered by DAC 8; and,
• Valuta.

Pensions from the first and second pillars as well as investments in start-ups and scale-ups that are eligible for tax reductions, are excluded from this tax. 

While the initial objective was to create a level playing field between different categories of financial assets, this ambition has somehow been revisited as the so-called Reynders tax - applicable to capital gains realized on certain debt funds- remains in place. 
 

This means in practice that capital gains on shares of a debt fund, could be subject to a 30% withholding tax on the component reclassified as interest, with the remaining capital gain taxed at 10%.

In line with current regulations, capital gains realized between/before maturity on fixed-income securities may be subject to a 30% tax on the interest accrued on the date of the transaction and a 10% tax on the remaining capital gain.  

Capital gains realized on life insurance contracts covered by the new tax will consistently be taxed at a rate of 10%, regardless of the assets used to cover the liabilities of the insurance company towards its policyholders. However, the government has now decided to maintain the insurance premium tax of 2% and not to reduce it to 0,7% to align it with the tax on stock exchange as initially planned.

2. Three different regimes 

The draft law establishes an exceptional regime, a special regime and a default regime. Capital gains from professional activities will be taxed as professional income at the standard progressive rate. 

2.1. The Exceptional Regime 

Internal capital gains that arise when shares are transferred to a self-controlled vehicle will be taxed at a rate of 33%. Hence, going forward no discussions will arise as to whether these transactions qualify as normal management of the private estate.

2.2. The Special Regime 

Shareholders with a significant shareholding of at least 20% will be subject to progressive rates ranging between 1,25% and 10%. The first € 1 million of capital gains realized, will be exempt and will be limited to €1 million per reference period of 5 years. 

As an example, Mrs.  X holds a significant shareholding and realizes a capital gain of € 500.000 in 2027, in 2028, in 2029 and in 2032. The capital gains realized in 2027 and 2028 will be exempt but not the amount realized in 2029 since the maximum exempt amount of € 1 million has been reached in 2028.  However, the capital gains realized in 2032 will be exempt as a new period of 5 years has started.   

The significant shareholding is assessed at the time of the disposal on an individual basis. There is no look back over a period of 10 years anymore and shareholdings held by relatives until the 4th degree will no longer be considered. 

When a significant participation is transferred to a non-resident entity located outside the EEA, the capital gains tax rate of 16,5% applies. 

2.3. The Default Regime 

Investors will benefit from an exemption on capital gains up to €10.000 per year (amount to be indexed annually). This threshold can be increased by a maximum of €1.000 per year if less than 10% of the €10.000 threshold is used. The unused part of that additional amount can be carried forward to next year(s), but the total amount exempted should not exceed € 15.000. 

Any capital gain in excess of such an amount is taxed at 10% but only if realized in the framework of the normal management of the private estate. If the normal management of private estate condition is not met, the capital gain will be taxed at 33% as miscellaneous income. 

3. Capital gain definition 

The taxable capital gain is defined as the positive difference between the acquisition value and the sale price. 

Detailed definitions of acquisition values are established for insurance contracts, specific equity remuneration plans and the transfer of residence from abroad to Belgium. 

If the acquisition value cannot be demonstrated, the entire compensation will be subject to 10%. 

Additionally, certain transactions are considered as transfers for compensation, such as the (partial) liquidation of an insurance contract or the transfer of the residence outside Belgium (cf. below on exit taxation). 

4. Exemption of historical capital gains

Historical capital gains will remain exempt. For sales after 1 January 2026 this means that the (deemed) fair market value of the financial asset per 31 December 2025 will qualify as the acquisition value for purposes of the capital gains tax. This value applies unless it can be demonstrated that the effective historic acquisition value is higher. This regime can be applied until 31 December 2030.

For fungible assets, the capital should be determined using the FIFO method.

The value of unlisted shares on 31 December 2025 equals the company’s equity, plus four times the EBITDA of the last financial year prior to 1 January 2026. Taxpayers may use a different valuation, provided that a substantiating valuation is prepared by a statutory auditor or certified accountant before 31 December 2026. Under exceptional circumstances, the tax authorities can verify the valuation if there are indications that it does not reflect fair market value. 

5.  Deductibility of capital losses

Capital losses are deductible under certain conditions. The deduction applies only to capital gains realized within the same year and within the same regime. For example, capital losses incurred under the Default Regime can be deducted from capital gains realized subject to the Default Regime, but not from those realized pursuant to in the Special Regime on significant participations. 

This means that a capital loss realized on bonds could be deducted against the capital gain realized upon the buy-back of a branch 23 insurance contract if both are realized in the same year. 

Realized capital losses cannot be carried forward to future years.

Additionally, capital losses are only deductible if all capital gains realized by the taxpayer have been declared in the annual tax return. 

6. Exit taxation

Exit taxation is introduced to prevent taxpayers from relocating outside Belgium to avoid capital gains tax. Under this system, unrealized capital gains are taxed when a taxpayer relocates outside Belgium. However, a deferral mechanism is available allowing effective payment only if the assets are sold within two years. After such period, no exit tax applies. If the relocation is made to an EEA country or a country with a double tax treaty that includes provisions for the exchange of information and mutual assistance in recovery, the deferral is in principle automatic. Taxpayers relocating to other countries can apply for a deferral subject to a sufficient financial guarantee for the payment of potential future taxes.

Also, no exit tax is due if the taxpayer returns to Belgium within two years.   

7. Withholding tax by Belgian intermediaries and insurance companies

As of 1 January 2026, Belgian financial intermediaries and insurance companies will be required to withhold 10% capital gains tax subject to the Default Regime, unless the accountholder(s)/policyholder(s) opt(s) out. This withholding tax will be applied on the gross amount of the capital gains realized, without taking into consideration any capital loss realized the same year or the exempt threshold. It will be up to the taxpayer to claim this deduction and/or exemption in its tax return. 

For joint accounts or insurance policies, all accountholders or policyholders must jointly exercise the opt out in order to be applied.   

Should an opt-out be chosen, financial intermediaries and/or insurance companies are obliged to report any realized capital gains to the tax authorities and taxpayers will be responsible for declaring these capital gains in their individual tax return during the relevant tax year (with the first filing due in tax year 2027). Belgian taxpayers must notify each of their intermediaries of their decision to opt out, as the opt-out must apply to all financial assets held by the taxpayer. 

8. New mandatory disclosure for transactions of the Special and Exceptional Regimes 

As transactions covered by the Special and Exceptional Regimes are exempt from withholding tax or from the information obligation in case the Belgian taxpayer opts out, Belgian intermediaries must declare these two types of transactions to the Belgian tax authorities, unless the person obliged to report is in principle subject to professional secrecy.