TAX PARADISE OVER: BELGIUM TO TAX YOUR CAPITAL GAINS FROM 2026

Stocks, crypto, life insurance… The Belgian tax authorities are ending decades of exemption. Overview of a major tax reform that will come into force retroactively on January 1, 2026.

Filed in the Chamber on December 17, 2025, the draft law is shaking up Belgian wealth taxation. From now on, selling your shares at a profit will no longer be tax-neutral. But the complexity of the new system deserves to be unpacked.

Three categories, three tax worlds

  1. “Family” sales: the 33% hammer

This is the most punitive regime. It targets internal capital gains, meaning situations where a shareholder sells shares to a company that he or she controls, alone or with close family members. The tax rate then climbs to 33%.

Important nuance: only sales are taxed. Contributions of securities remain exempt, a logical exception since 2017, when the tax-freed capital upon contribution corresponds to the initial acquisition value and not the actual value.

Tip to know: The tax only applies if the seller controls the transferee “alone or with” his family. Result: if you sell your shares to a holding company controlled exclusively by your children (without you holding any shares), you escape this draconian regime.

  1. “Substantial participations”: a tailor-made regime for entrepreneurs

To avoid discouraging entrepreneurship, the legislator has created an advantageous progressive regime for holders of at least 20% of a company’s capital.

The progressive scale:

  • Up to €1 million: 0% (full exemption)
  • From €1 to €2.5 million: 1.25%
  • From €2.5 to €5 million: 2.50%
  • From €5 to €10 million: 5.00%
  • Over €10 million: 10.00%

Beware of the time trap: the €1 million exemption is only applicable once per 5-year period. So it’s impossible to sell several participations in a short time while benefiting from the exemption each time.

The anti-relocation clause: If you transfer your participation to an entity located outside the European Economic Area, the first million remains exempt, but as soon as you exceed it, a flat rate of 16.5% applies to the entire excess capital gain. No more structures to exotic tax havens.

  1. The 10% general regime: a new standard for all

All other financial assets fall into this catch-all category that covers a very broad spectrum:

  • Shares and units (excluding cases 1 and 2)
  • Life insurance branches 21 and 23
  • Cryptocurrencies
  • Foreign currencies

Tax rate: 10%

The cumulative allowance: €10,000 of capital gains are exempt each year. If you don’t use it, this allowance increases by €1,000 per year for a maximum of 5 years, reaching €15,000. A tax savings mechanism that rewards patience.

The rules of the game: what you absolutely need to know

Normal management, cardinal criterion

All these capital gains are only taxed if they result from “normal management of private assets”. If the tax authorities consider that you have engaged in abnormal management (for example, excessive speculative operations), it’s the maximum penalty: 33% taxation, regardless of the type of asset.

Sales only

The new tax only applies to transfers for consideration. Gifts and inheritances remain outside the scope.

Two major exceptions treated as sales:

  • Redemption of life insurance (liquidation of the contract)
  • Tax emigration: leaving Belgium triggers an “exit tax”, although deferred payment is possible under certain conditions

Usufruct: beware of the trap!

In the case of split ownership, it’s the bare owner who pays the tax, not the usufructuary. A provision that can create delicate situations in classic wealth structures.

Non-residents spared

Good news for those who have already left the country: the tax does not apply to non-residents. An element that could accentuate tax exile.

Protecting the past: “historical” capital gains ring-fenced

For legal certainty, the legislator has provided that only capital gains realized after January 1, 2026 will be taxed.

How does it work?

For listed securities: the last closing price of 2025 is taken as reference.

For unlisted securities: three valuation methods to choose from, the law retaining the highest:

  1. The value of a recent transaction (in 2025) between independent parties
  2. The value stated in a contractual formula in force on January 1, 2026
  3. For shares: equity + 4 times EBITDA of the last financial year closed before January 1, 2026

Recommended alternative: You can have your unlisted securities valued by an independent statutory auditor or certified accountant, but be careful: deadline December 31, 2027.

Withholding tax: source deduction (or not)

Automatic withholding

For financial instruments and life insurance under the general regime, Belgian banks and insurers will automaticallywithhold a 10% withholding tax. This withholding is liberating: once withheld, you have nothing more to declare.

Notable exception: No withholding on cryptocurrencies and currencies – you will have to declare them yourself.

Anomaly to report: According to the Explanatory Memorandum, the intermediary must withhold the withholding tax even on substantial participations (when in principle, they escape withholding) or in case of abnormal management. If you are in this situation without having opted for opt-out, you will have to request a refund of the excess.

The “opt-out” option: to avoid pre-financing

Imagine: you sell a €5 million participation with €3 million in capital gains. Your bank withholds €300,000 when you actually only owe €37,500 (given the progressive scale). Pre-financing can be colossal.

The solution: Notify an “opt-out” to your bank before June 30 of the current year. Consequences:

  • No withholding tax will be retained
  • Your bank will automatically inform the tax authorities
  • You must declare your capital gains yourself
  • The opt-out remains valid until revocation (effective January 1 following)

Exemptions not to be missed

Several situations completely escape the tax:

✓ Pension savings plans: capital gains in the second and third pillars remain protected

✓ Double taxation avoided: if your capital gain is already taxed for another reason (carried interest, bonus on buyback of own shares, Cayman tax…), no double taxation

✓ Approved non-profit organizations: organizations that can receive tax-deductible donations are exempt

The absurd calendar

Paradox of this reform: it applies retroactively from January 1, 2026, while the law has still not been voted on as of January 20, 2026. Specific transitional measures concerning withholding tax are provided to manage this Kafkaesque situation.

Key takeaways

Belgium is ending decades of almost total exemption of private capital gains. While the regime reserves preferential treatment for entrepreneurs (substantial participations), it introduces generalized taxation that will affect all resident investors.

Immediate points of vigilance :

  • Have your unlisted securities valued before the end of 2027
  • Anticipate opt-out if you hold significant participation
  • Review your family wealth structures
  • Consult to avoid the “abnormal management” trap

Warning: The text may still evolve before its final vote in Parliament.

Tristan Krstić & Martin Van Beirs

Faber Inter Legal Brussels

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