New federal government agreement - Capital gains tax & tax reforms for investors

On Friday 31 January 2025, the five political parties expected to constitute a new Belgian federal government reached an agreement on their policy for the coming five years. This agreement includes the long-debated capital gains tax for individual shareholders as well as a series of other reforms relevant to private investors.

We hereafter outline the main features of the new capital gains tax for individual shareholders and the relevant other areas where changes are expected for private investors.

The government agreement also includes a series of reforms related to corporate income tax, salary taxation and tax procedural measures. The link to these other alerts can be found here Tax alerts | EY - Belgium. 

New capital gains tax

The new government agreement introduces a 10% levy on such capital gains. The government agreement refers to a “solidarity contribution” (solidariteitsbijdrage/contribution de solidarité) but this contribution is expected to constitute personal income taxes that are levied based on the reporting of the capital gains in the personal income tax return. 

The precise entry into force date is not yet disclosed and the new draft legislation is still to be awaited in order to understand all details of this new taxation. However, the government agreement reveals a high degree of complexity.

1. Assets covered

Both listed and unlisted shares are covered by the new tax albeit that stock quoted shares will in practice be treated differently compared to shares in a privately owned company due to the introduction of a significant interest rules (aanmerkelijk belang regeling/régime de participation importante) (see infra).

The government agreement also explicitly states that the new levy applies to financial assets including crypto assets. In recent years, the Belgian ruling commission had already clarified that gains on crypto assets should be treated the same way as capital gains on shares.

2. Significant interest rule

Small investors will benefit from an exemption on capital gains up to €10.000 per year (with an annual indexation). Any capital gain in excess of such amount will be subject to 10% capital gains tax.

For a significant interest of at least 20%, progressive rates will apply. 

The progression applicable to significant interests will apply an exemption on the capital gain of up to €1 million. The taxable base between €1 million and €2.5 million will be subject to 1,25% capital gains tax, the taxable base between €2.5 million and €5 million will be subject to 2,25% capital gains tax, the taxable base between €5 million and €10 million will be subject to 5% capital gains tax and any capital gain in excess of €10 million will be fully taxed at 10%.

Note that this is the latest version of the significant interest rule according to our information. However, in another version of the government agreement, the significant interest is defined as a stake of 10% with different progressive rates applicable to the capital gains up to €20 million.

3. Exemption of historical capital gains

The text specifies that the solidarity contribution will not apply retroactively meaning that capital gains built up until the entry into force of the new regime will remain exempt.

Firstly, as stated before, the specific entry into force date has not been disclosed. Secondly, no details have been published on how the built-up capital gain will need to be determined, valued or disclosed This will be mostly relevant for shares in privately owned companies for which no stock quotation is available.

4. Deductibility of capital losses

Capital losses will be deductible. The deduction will only apply to capital gains realized on the same category of income within the same year. Capital losses cannot be carried forward. This rule will only be relevant for investors who realize different trades within the same year, some being successful, some being unsuccessful.

Other announced reforms relevant to private investors

• Besides the new capital gains tax, a series of announced reforms will be relevant to private investors:
• Carried interest: The new government will introduce a specific and competitive tax framework similar to regimes in neighboring countries to stimulate the fund industry in Belgium. This regime will include a maximum tax rate of 30% on movable income, without affecting existing plans. It remains unclear which type of plans will be considered to constitute carried interest and whether the interposition of a corporate vehicle will be amended as well (currently resulting in 15% taxation further to VVPRbis or liquidation regime referred to below).  
• Tax on securities accounts: Compared to previous notes, the government agreement does not include an increase of the 0,15% tax on securities accounts but the new government will examine how avoidance of this taxation can be tackled.
• VVPRbis / liquidation regime: The two regimes will be harmonized resulting in a waiting period of three years before dividend distributions qualifying for the regime can be made at a combined effective tax rate of 15% (instead of 30%).   
• Stock exchange tax: This taxation will be modernized and simplified in order to tackle existing issues and create a level playing field for different types of investments in companies and funds. The fund-to-fund provision (dakfondsbepaling/fonds de fonds) will be amended and clarified.

Private Privaks/Pricafs Privées: In order to encourage venture capital investments, regulatory rules in relation to Private Privaks/Pricafs Privées will be amended in order to overcome current bottlenecks such as the limited term of the fund, the number of shareholders, the time to set up the fund and the limited permitted investments. Generally, a broader scope of application can be expected for the aforementioned items currently limiting the use of Private Privaks/Pricafs Privées. 

Conclusion

The new government agreement contains a number of new measures relevant to private investors.

Notably the long-debated capital gains tax has been maintained in the final government agreement at 10% or progressive rates in case of a significant shareholding exceeding 20%, Implementation of the tax is still to be defined based on the legislative process, notably on grandfathering of capital gains built up to date and the entry into of force.

Other rumored changes have not been upheld, notably an increased tax on securities accounts. 

For a series of other reforms relevant to private investors the information made available is high level (e.g. for carried interest methodologies and Private Privaks/Pricafs Privées).