Legal news
Bring us your capital gains … they will be exempted in Belgium
Belgium has always been known as a tax paradise because of its lack of a capital gains tax, at least if the capital gains were made within the “normal management of a private estate”. Capital gains realised by individuals on shares in companies and other financial instruments were simply tax exempt. That was very attractive for investors who actively managed their financial investments on the stock exchange or a trading platform (as long as they are not day-trading) and for entrepreneurs who sold their participation in an operating company.
This made Belgium a tax haven for individuals planning to make important capital gains ; by taking up residence in Belgium, they could avoid paying capital gains tax as long as their country of origin did not levy an exit tax.
The Act of 6 April 2026 has introduced a capital gains tax on financial assets. However, this tax is not punishing.
For all taxpayers, the capital gains tax is a fixed rate of 10% with an allowance of €10,000 per year. The tax is only due on capital gain made since 1 January 2026 is taxed.
Business owners who hold at least 20% of the shares of their company can claim an allowance of €1,000,000 ; this allowance is available every five years. The rates are :
- € 0 – € 1,000,000 : 0%
- €1,000,000 – € 2,500,000 : 1.25%
- € 2,500,000 – € 5,000,000 : 2.5%
- € 5,000,000 – € 10,000,000 : 5%
- Over € 10,000,000 : 10%
This means that on a capital gain of €10 million, the tax is (only) €331,250, for a capital gain of €20 million, it will be a million more.
The capital gains tax on financial assets is not retroactive ; it is calculated on the gain realised since the beginning of 2026.
It is therefore essential to obtain a valuation of the company as at that date, and the law gives a default valuation method : the value of equity plus four times the company’s EBITDA for the last financial year before 2026. However, for most business activities four times the EBITDA is too low. The safest method is to have an (independent) company auditor or certified public accountant to establish the value of the financial assets before the end of 2027.
For individuals who take up residence in Belgium, the law gives a step up. The tax is calculated with reference to the market value of the financial assets on the day they become Belgian residents. They must, however, check that no exit tax is due when they come to Belgium.
This step up does not apply to beneficiaries of carried interest. The gain they receive is not considered to be a capital gain anymore. Last year, Belgium has introduced a specific tax regime ; carried interest is now taxed as investment income at a fixed rate of 25%.
The new capital gains tax may discourage Belgian residents who stand to make an important capital gain from leaving Belgium if they are in a hurry. Belgium has an exit tax on latent capital gains, but the exit tax is deferred. It is only due if the gain is realised within two years of leaving Belgium. In certain cases, the deferral must be authorised by the tax administration with a guarantee for the payment of the tax.
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.
Belgium remains a tax haven for capital gains.