Which accounts and securities would be targeted by this tax? What would the tax threshold be and what anti-abuse measures are already foreseen? The bill introducing the annual tax on securities accounts was published on 5 January: our experts have broken down the key points for you.
Having been found unconstitutional and thus annulled by the Constitutional Court in its ruling of 17 October 2019, the tax on securities accounts is to be reinstated.
Following the governmental agreement of 30 September 2020 targeting “a fair contribution from individuals with the greatest ability to pay, while respecting entrepreneurship”, this latest version of the tax on securities accounts was the subject of draft legislation approved by the Belgian Council of Ministers on 2 November 2020 and submitted to the Council of State for review. This review was completed on 2 December and gave rise to a number of amendments, which resulted in the bill published on 5 January 2021.
What are the most significant features of this bill?
What does this ‘taxe d’abonnement’ (subscription tax) involve?
The legislature describes it as an annual tax targeting the use of securities accounts as a means of holding and managing financial instruments, and this is irrespective of the level of wealth of the accountholder(s).
What will the tax rate be?
The rate of this new tax would be kept at 0.15% on an annual basis.
Which securities accounts are concerned?
This tax targets all securities accounts opened via a financial intermediary established in Belgium (on behalf of natural persons and legal entities residing in Belgium or abroad) as well as securities accounts opened on behalf of Belgian residents via an intermediary established abroad.
This definition broadens the scope of the tax on securities accounts held by insurance institutions established in Belgium in relation to branch 23 life insurance.
Which financial instruments fall within the scope of this tax?
The tax on securities accounts would now concern all financial products held in securities accounts, with no exceptions. Under this broader definition, the tax would apply to financial products that were not initially included in the scope, such as structured products without capital protection. This would also be the case for commodities and cash, insofar as they are deposited in a securities account.
Registered securities would continue to be exempt from this tax.
What would the tax threshold be?
The new tax only applies to securities accounts containing financial instruments of which the total value averages EUR 1 million or more. This threshold applies to each securities account individually.
There would be no breakdown according to the number of account holders.
What anti-abuse measures are planned?
In Belgium, no new tax laws are now enacted without provisions aimed at cracking down on transactions intended to circumvent enforcement. This new tax is no exception.
The legislature thus identifies a series of operations aimed at circumventing the application of the new tax that will be deemed to constitute tax abuse and will therefore not be permitted by the Belgian tax authorities.
Although the presumption of tax abuse can be refuted by the taxpayers in question for certain operations, the same will not apply to:
- splitting a securities account into several securities accounts held with the same intermediary;
- converting taxable financial instruments (held in a securities account) into registered financial instruments.
These operations will be treated as abusive transactions and the taxpayers in question will not be permitted to provide evidence that they occurred for reasons not relating to tax.
While the outline of this new tax appears to have been established, many uncertainties still remain and the bill as submitted will undoubtedly require further clarification or amendment, notably concerning the rules on how the tax is applied but also regarding the exact scope of certain provisions (such as anti-abuse measures).
Situation as at 08/01/2020.
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