What is the tax on securities accounts?
This annual tax (0.15%, 0.30% once the law enters into force) applies when the average value of taxable financial instruments held in a securities account exceeds €1 million during the reference period.
Anti-abuse measure: context and targeted transactions
A report by the Court of Audit indicated that the tax on securities accounts could be circumvented through avoidance strategies. The Arizona coalition has proposed to the legislator to introduce a new specific anti-abuse measure to counter them.
Two types of operations are specifically targeted: “conversions” and “transfers” of securities.
These operations must be reported by the financial institution to the Belgian tax administration.
They are presumed by law to have been carried out solely for the purpose of avoiding the tax on securities accounts. However, the person who carried out such an operation may provide evidence to the Belgian tax administration to prove otherwise.
"}},{"componentType":"sectionTitle","title":"Frequently asked questions"},{"componentType":"paragraph","richBody":{"value":""}},{"componentType":"accordion","accordionList":[{"title":"Who is subject to the tax on securities accounts?","richBody":{"value":"The annual tax on securities accounts applies to:
The tax applies when the average value of taxable financial instruments on a securities account exceeds 1 million euros during the reference period.
The average value is equal to the sum of the values of the taxable financial instruments recorded at the different reference points during the reference period of a securities account, divided by the number of reference points.
A standard reference period begins on October 1 of year X and ends on September 30 of year X+1.
The four reference points of a standard reference period are December 31, March 31, June 30, and September 30.
The number of account holders of the securities account has no impact on the calculation. In other words, the average value is not divided by the number of holders.
"}},{"title":"Which transactions are specifically targeted by the anti-abuse measures?","richBody":{"value":"1. The “Conversion”
This operation involves converting securities (shares, bonds, etc.) held in a securities account with a bank into registered dematerialized securities (= securities registered directly in the name of the owner in the issuer’s securities register – for example, a Belgian company).
If, immediately before the conversion, the total value of the securities on the relevant securities account exceeds 1,000,000 euros, this conversion may be considered as a tax avoidance strategy.
Indeed, registered securities are no longer recorded in the securities account and are therefore no longer included in the calculation of the taxable base.
This conversion can be used as a tax avoidance strategy, as registered shares are no longer recorded in the securities account and are therefore no longer included in the calculation of the taxable base.
2. The “Transfer”
This refers to the transfer of part of the taxable financial instruments from one securities account to one or more other securities accounts, if the total value of the securities on the original account exceeds 1,000,000 euros immediately before the transfer, and provided that:
Any “conversion” or “transfer” operation as defined is legally presumed to be abusive. In other words, the law assumes that such an operation is carried out solely to avoid the tax on securities accounts.
However, the taxpayer (= the holder of the securities account who carries out the operation) can overturn this legal presumption by providing evidence to the Belgian tax administration to the contrary. In other words, the taxpayer can demonstrate that the conversion or transfer is primarily justified by a reason other than avoiding the securities account tax.
The following situations may be taken into account to overturn the presumption of abuse:
The following situations cannot be used to overturn the presumption of abuse:
The fact that transactions are reported by the bank to the Belgian tax authorities does not necessarily imply that they are problematic or abusive. As described above, there are many valid reasons that can justify a “conversion” or “transfer,” meaning the classification as tax abuse is not upheld. In many cases, it will be sufficient to submit this justification to the tax administration.
"}},{"title":"What happens if the reason is not accepted as valid evidence to the contrary?","richBody":{"value":"If the tax administration rejects the justification provided by the account holder and concludes that there has been tax abuse, it will disregard the operation (conversion or transfer) and recalculate the tax as if it had not occurred. This may result in an increase in the taxable base, and therefore an additional tax. This additional tax must be paid directly by the taxpayer to the tax administration, without any involvement from the bank.
"}},{"title":"What are the key steps in the implementation of the new tax regime?","richBody":{"value":"The bank currently transmits specific data to the tax administration via the Central Point of Contact (CPC)* of the National Bank of Belgium (NBB).
What’s new?
The Central Point of Contact (CPC) for accounts and financial contracts is a unique, structured database containing information about accounts and financial contracts existing in Belgium. Foreign accounts held by Belgian individuals are also recorded in the CPC.
More info on Central Point of Contact for accounts and financial contracts (CPC) | National Bank of Belgium
"}}]}]}}}