From 1 October 2019, individual investors who have securities accounts with an average cumulative value of at least EUR 500,000 will no longer be subject to a tax of 0.15%. However, the tax remains applicable for the period to 30 September and will still be levied in 2019.

Annulment of the tax on securities accounts by the Belgian Constitutional Court

In its ruling of 17 October 2019, the Constitutional Court found that the Law of 7 February 2018 establishing a tax on securities accounts was unconstitutional in several respects. The court heard seven actions for annulment challenging the law on the grounds that it violated the principles of equality and non-discrimination, the principle of tax legality, and European Union law.

In its ruling, the court found that the Law of 7 February 2018 violated the principle of legality and non-discrimination in several respects:

• The first violation related to the fact that the tax was only payable when a person held specific financial instruments (equities, bonds, investment fund units, investment company shares, certificates of deposit and warrants) in a securities account. Given the objective of the law, which was to make tax policy fairer, the court argued that it was manifestly unreasonable for the tax to be payable on certain financial instruments and not others.
• The second reason why the law was found to be unconstitutional was the fact that shares were only subject to the tax when held in a securities account. In the opinion of the court, there was no justification whatsoever for registered shares to be treated differently, given that these also serve as a barometer of wealth.
• Lastly, the court found that it was discriminatory to permit a person who actually held financial instruments with an average value of EUR 500,000 or more to avoid paying the tax if the securities account was held by several parties.

In light of the above, the court decided to annul the Law of 7 February 2018.
However, to avoid budgetary, administrative and other difficulties that could arise regarding a potential rebate, the Constitutional Court decided to uphold the effects of the law for reference periods ending on or before 30 September 2019. In other words, the ruling annuls the tax from henceforth, but not retroactively. As such, the tax remains payable and no rebate is to be offered by the State.

Non-retroactive annulment

Banque de Luxembourg has appointed a specialist legal firm to try to secure a rebate of the tax levied in December 2018 on our clients’ behalf.
These cases are currently pending before the Brussels district court and may potentially lead to a rebate despite the Constitutional Court’s ruling not being applied retroactively.

When does the tax on securities accounts officially end?

The tax ceased to apply on 1 October 2019.

Will the tax on securities accounts be levied this year? What are the implications for Banque de Luxembourg clients?

For the period ending 30 September 2019, about which clients of the Bank recently received a letter from us, the tax on securities accounts remains applicable and will therefore be levied this year for the last time.

Payment must be made to the Belgian tax authorities by 20 December 2019. Where possible, we will make every effort to assess the option of taking legal action to request a rebate of this tax.

As a reminder, as a client of Banque de Luxembourg:

• If the average value of your securities account with our Bank was EUR 500,000 or more over this period, the Bank will levy the associated tax automatically during the first fortnight of December 2019.
• If the average value of your securities account with our Bank was lower than EUR 500,000 but you would like to ask us to levy the tax on securities accounts, it is essential that you send us the opt-in reply slip (which the Bank sent you in October) by 30 November 2019 at the latest. The Bank will levy the tax during the first half of December 2019.

Tax on securities accounts: situation as at 31/10/2019.

Would you like to know more about Belgian taxation?

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Bernard Goffaux

Head of Tax Department

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Marie Breels

Operational tax services

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