The new capital gains tax, owing to a significant exemption, relatively low rates and the absence of retroactive effect, should not turn Belgium into a tax nightmare for major shareholders. The regime is therefore likely to remain attractive to entrepreneurs seeking tax efficiency.
Historically, capital gains realised by individuals on shares in companies (and other financial instruments) were exempt from tax in Belgium, irrespective of whether those individuals actively managed their investments (for example, through stock market trading) or were business owners or shareholders disposing of their company. This favourable tax treatment was not without consequence. It encouraged some individuals from jurisdictions with less advantageous capital gains regimes to become Belgian tax residents and, conversely, likely discouraged certain Belgian-resident entrepreneurs from relocating abroad.
Will this change following the Act of 6 April 2026, which, as a general rule, subjects capital gains realised from 1 January 2026 onwards to tax?
For shareholders holding at least 20% of the securities of a company, the tax impact remains extremely limited. Capital gains are exempt up to EUR 1 million, and this exemption may be renewed every five years. Amounts exceeding the exempt threshold are taxed at relatively modest rates:
- EUR 1,000,000 to EUR 2,500,000: 1.25%
- EUR 2,500,000 to EUR 5,000,000: 2.50%
- EUR 5,000,000 to EUR 10,000,000: 5.00%
- Above EUR 10,000,000: 10.00%
It should also be noted that the tax has no retroactive effect. It applies only to the increase in value of the relevant company from the key date of 1 January 2026 onwards. It is therefore essential to obtain a valuation of the company as at that date, and the Act provides a range of acceptable valuation methods for this purpose.
For prospective tax immigrants to Belgium, the acquisition value of their shareholding will generally be determined by reference to the date on which Belgian tax residence is established. Such individuals will, of course, need to take account of any applicable exit tax in their former jurisdiction of tax residence, together with any available arrangements for deferred payment.
As a result, despite the introduction of a capital gains tax, Belgium is likely to remain an attractive jurisdiction for entrepreneurs and substantial shareholders seeking a competitive and predictable tax environment.
For further information, please contact:
Olivier Bertin, Partner, Bird & Bird
olivier.bertin@twobirds.com
