Federal government approves draft law for capital gains tax

The federal government has approved a draft law introducing a tax on capital gains on financial assets in alignment with the coalition agreement. The draft law will now be sent to the Council of State for legal vetting. Parliamentary adoption is expected in September at the earliest. The new rules will enter into force as from 1 January 2026.

According to the draft law, the new capital gains tax will be applicable to individuals and to not for profit entities (i.e. legal entities subject to the Belgian legal entities taxation, with the exception of entities recognized to receive tax-deductible donations), but not to companies.

The goal of the draft law is to tax all transfers (for consideration) of financial assets outside the exercise of a professional activity and within the normal management of private assets as miscellaneous income. It should be noted that the transfer of shares (but also of other financial assets) when done outside the normal management of private assets will still be taxable at 33%.

The draft law distinguishes three categories of taxable capital gains:

1. Internal capital gains as a result of the transfer (sale) of shares and profit certificates to a buyer that is controlled by the seller alone or together with his family
2. Capital gains on significant interest following the transfer of shares in case of a participation of at least 20% by the seller alone
3. Capital gains upon other transfers of financial assets

1)     An internal capital gain will be taxed at 33%

2)     The transfer of a significant interest will be taxed as follows:

In case of a transfer to a non-EEA entity, a single rate of 16,5% applies (with also the exemption of the first 1 million EUR)

3)     Other transfers of financial assets: 10%, where the first 10,000 EUR (subject to annual indexation) will be exempt. If the exemption is not used, an additional exemption of maximum 1.000 EUR can be claimed in the next year for 5 years in a row, resulting in a possible maximum exemption of 15.000 EUR after 5 years. 

According to the draft law, the following four types of financial assets are within scope:

• Financial instruments, which include a.o.: securities such as shares, bonds and other debt instruments, money market instruments and participation rights in collective investment institutions
• Saving or investment insurance contracts, such as: branch 21, 22, 23, 26 and foreign contracts
• Crypto-assets
• Currencies, including a.o. investment gold 

The taxpayer is the (bare) owner or entitled party.

The following capital gains are temporarily exempt following the draft law:

• Capital gains on shares in an investment company or on participation rights in an investment fund due to an (equated) merger or demerger (e.g. reorganization of compartments)
• Capital gains on participation rights in a contractual investment fund due to conversion into an investment company

The exemption will be maintained as long as the received shares are held.

In the draft law, the following capital gains a.o. are permanently exempt:

• Certain capital gains upon contribution of shares (not within scope of exemption of art. 95 BITC)
• Capital gains on financial assets benefiting from a tax reduction for long-term savings (second and third pillar pensions)
• Capital gains on financial assets already taxable as movable or professional income or subject to long-term savings tax (e.g. income already subject to ‘Reynders tax’)

The draft law also introduces an exit tax when the owner of financial assets transfers his residence or seat of fortune abroad.

• However, payment is automatically delayed in case of a transfer of residence within the EEA or to a treaty country (with exchange of information and mutual recovery assistance clauses). The delay ends in case of a transfer of assets or in case of a transfer of residence outside the EEA or treaty country.
• Delay of payment can be requested in case of a transfer of residence outside EEA or treaty country provided sufficient guarantee of payment is given. The delay of payment ends in case of a transfer of assets.
• The payment obligation ends in case of re-immigration to Belgium or anyway after 24 months.

• The capital gain equals the received price minus the acquisition value. Costs or taxes are not deducted.
• Can be deducted: capital losses suffered during the same taxable period within the same category (1, 2 or 3) of taxable capital gains.
• The FIFO method (First In, First Out) must be used when assets of a similar nature were purchased at different times.
• For share options and shares with price reduction, the acquisition value equals the value of the shares at time of exercise of the option or at time of acquisition of the shares or the value of the option at time of its possible exercise
• In case of emigration, the received price equals the value at the time of emigration. In case of immigration, the acquisition value equals the value at the time of immigration.
• For assets in foreign currency, the exchange rate at time of acquisition and realization must be used.
• Exemption of historical capital gains: if assets are acquired before 1/1/26, the draft law provides that the acquisition value equals the value per 31/12/25 unless the acquisition value is higher (until 31 December 2030).
  • The value per 31/12/25
    • For listed financial assets equals the closing price of 2025.
    • For life insurance and capitalization transactions equals the highest of the inventory reserve on 31/12/25 or the sum of paid premiums.
    • For non-listed financial assets equals the highest of
      • The value applied between independent parties, at the occasion of the establishment of the company or its latest capital increase in the course of 2025.
      • The value which is the result of a valuation formula in a contract or a contractual offer of sale option which is effective per 1/1/26.
      • In case of shares and shares equivalent: equity + 4 x EBITDA of the last FY closing before 1/1/26. Alternatively, the taxpayer can also apply a value determined by a non-statutory auditor or independent certified accountant no later than 31/12/26.

With regard to capital gains realized on transfers of financial assets (category 3 - financial instruments and insurance contracts) the tax must be withheld at source via a Belgian intermediary. The exemption of the first 10.000 EUR, the deduction of capital losses and any higher acquisition value are not taken into account when withholding the tax. The taxpayer can also opt to not withhold the tax (to be applied for all financial assets and all intermediaries). Intermediaries must inform the tax authorities about the taxpayer’s choice and about the income it relates to.

Internal capital gains (sale) (category 1) and capital gains on significant interest (category 2) must be reported in the tax return. The exemption of the first 10.000 EUR (category 3), the deduction of capital losses and any higher acquisition value must be requested via the tax return. There is a reporting obligation for advisors involved in the set-up of the transactions of category 1 and 2.

Should you have any questions regarding the new capital gains tax, do not hesitate to contact your KPMG advisor. It is important to evaluate your current situation and, where necessary, to prepare for the introduction of the capital gains tax. The valuation of financial assets per 31 December 2025, and especially of non-quoted shares, will be crucial. The tax authorities can always contest the valuation if they deem it too high and will face no time constraint in this respect, even if the transaction resulting in the capital gain takes place many years from now. KPMG can assist you with drafting a well-documented valuation report. We will keep you up to date on any future developments.