New circular letter clarifies withholding tax obligations in respect of capital gains tax

Following the publication of the initial guidance on the new capital gains tax which focused on personal income tax (cf. our July update), the Belgian tax authorities have recently issued a second circular letter, focused on the withholding tax mechanism. This new guidance covers both (i) financial intermediaries established in Belgium that have a general withholding tax obligation and (ii) legal entities subject to Belgian legal entities tax that must declare and pay the tax themselves i.a. through a withholding tax return.

While the new capital gains tax applies from 1 January 2026, the withholding tax obligations only took effect on 1 June. The new circular letter builds on the principles introduced by the Royal Decree of 27 May 2026 (cf. our May update) and primarily consolidates the existing framework from a withholding tax perspective, whilst also clarifying some practical details. We have selected some of the more practically relevant points.

The scope of the withholding tax obligation is limited.

First, withholding tax, in principle, applies only to ‘Category C’ gains, i.e. the 10 % category and where the recipient of the gains is a Belgian tax resident. It does not apply to internal gains (category A) and significant shareholdings (category B). It is not up to the intermediaries to assess whether the transaction could qualify as Category A or B and therefore, in practice, they will always need to withhold. If 10 % tax has been withheld, it is up to the taxpayer to report them as internal gains or gains from significant shareholdings in their personal income tax return, should these regimes apply. 

Secondly, only ‘financial instruments’ (shares, bonds, ETF’s, etc.) and ‘insurance agreements and capital redemption operations’ are subject to withholding tax. Several categories of taxable gains therefore remain out of scope. These include, for instance, crypto-assets or investment gold. Such gains will always need to be reported in the taxpayer's annual personal income tax return.

Although this is not news, its importance cannot be understated: the calculation of the taxable base for withholding tax purposes differs from the base for personal income tax purposes. Financial intermediaries established in Belgium will calculate withholding tax without considering the annual exemptions e.g. EUR 10.000, deductible capital losses and for assets held before 2026 higher historical acquisition values:

• For financial instruments acquired until 31 December 2025 the financial intermediary will in principle always take into account as starting point the snapshot value as at 31 December 2025; and
• For financial instruments acquired as from 1 January 2026 the financial intermediary will in principle take into account the actual acquisition value (if that information is available or properly demonstrated).

Where the acquisition value cannot be substantiated, tax will be withheld based on the full proceeds, rather than the actual gains. This could be the case where assets were transferred to a different intermediary during their lifecycle. In the meantime, the financial sector has nevertheless agreed on a code of conduct, to ensure information is shared as much as possible to avoid such situations to the maximum extent (via a standardized template).

For withholding tax purposes, the first-in-first out method needs to be applied and where amounts are expressed in foreign exchange rate, the amounts need to be converted to EUR both at acquisition and transfer for consideration at the respective applicable FX-rates.

Any optional or mandatory corrections will thus have to be done through the annual income tax return.

For example, for younger taxpayers who may not have any other taxable income, globalization of the income through the tax return may prove beneficial as well. The tax-free allowances (“belastingvrije som” / “quotité exemptée”) may reduce the tax liability, also with respect to capital gains and for which for example withholding tax was withheld, entirely to zero.

However, for legal entities, the situation is different as they are personally liable for withholding tax. The exemptions can therefore be considered already at withholding level, when applying the withholding themselves.

Conversely, the 10 % withholding may equally be lower than the final tax liability. This could be the case where the gains qualify as internal gains (33 %) or gains from significant shareholdings transferred outside of the EEA (16,5 %). It would also occur where the income qualifies as speculative or abnormal management of private assets (33 % + communal taxes). 

Where taxpayers have opted out of withholding tax (see circular letter for more details), Belgian financial intermediaries are legally obliged to report the gains and the identification details of the beneficiaries to the Belgian tax authorities through annual reporting forms. The circular letter reiterates the reporting requirements mandated by the Royal Decree and adds some practical details.

Forms 281.08 and 281.09 have been established by the authorities, the former applicable to securities accounts, the latter to insurance agreements.

These forms are to be submitted electronically through BELCOTAX before 1 March of the following year.

Such reporting forms are logically not required for gains that do not carry a withholding tax obligation.

The circular letter also addresses legal entities subject to Belgian legal entities tax – In French: “impôt des personnes morales” and in Dutch: “rechtspersonenbelasting”.

Certain non-profit organizations and other qualifying legal entities are subject to capital gains tax, with exemptions for non-profits entitled to fiscally facilitated donations.

As mentioned, these legal entities are personally liable for withholding tax (not the Belgian financial intermediary), for gains of Category C.  Their gains are thereby deemed to be attributed on the last day of the taxable period (e.g. the calendar year), allowing for a single annual withholding tax declaration.

Given the late approval of the legislation, the law itself already provided for certain exception for 2026. The circular letter confirms these rules. For gains realized between 1 January and 31 May 2026, withholding tax is not mandatory, yet taxpayers were able to request voluntary withholding tax by 31 August 2026.

The Belgian intermediaries benefit from an extended deadline until 30 November 2026 for payment of this voluntary withholding tax, along with the taxes withheld for gains realized from 1 June until 31 August 2026. This supersedes the ordinary 15-day period.

The authorities have meanwhile adjusted the applicable withholding tax form 273 to account for this new type of withholding tax on capital gains.