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Annual Tax on Securities Accounts
What is it about? The Law of February 17, 2021 (B.S. 25/02/2021) introduced an annual tax on securities accounts with an average value of more than 1 million euros during a given reference period (Articles 201/3 to 201/9/5 of the Code of Miscellaneous Duties and Taxes). The tax is only due if the average value of the securities account during the reference period exceeds the threshold of 1 million euros.
Does the 1 million euro threshold apply per securities account or per account holder? The threshold of 1 million euros applies per securities account, regardless of the number of co-holders. For example, a securities account with a value of EUR 2 million held by 3 co-holders is subject to the tax. On the other hand, a person who has two securities accounts with a value of EUR 999,999.00 each is not concerned (note the anti-abuse provisions, see question "What are the anti-abuse measures?").
Who is concerned ? The tax is applicable to accounts held by natural persons as well as to accounts held by legal entities (companies, non-profit organizations, etc.). Certain exemptions are foreseen for some specific types of accounts held by certain legal entities (e.g. accounts held in their own name by insurance companies).
I am not a Belgian tax resident, am I affected? Accounts held by individuals who are tax residents of a country that has signed a double tax treaty with Belgium may be exempt from the tax on securities accounts. This only applies when the double tax treaty between Belgium and their country of tax residence encompass income and assets. It is the case e.g. for the Netherlands, Germany and Luxembourg. Securities accounts of persons who are tax residents of these countries are thus exempt. In contrast, it is not the case for the United Kingdom and France. Securities accounts of persons who are tax residents of these countries are therefore not exempt. Moreover, the exemption only applies if ALL account holders are tax residents of exempted countries. Thus, an account is taxable as soon as only one of the account holders is a Belgian tax resident, or a resident of a country that has not signed a double tax treaty with Belgium (or that has signed a double tax treaty that only covers income).
How is the tax calculated? The tax is equal to 0.15% of the average value of taxable instruments held in the securities account during the reference period. However, for accounts with an average value between 1 000 000,00EUR and 1 015 228,43EUR , the tax is lower. In that case, it is equal to 10% of the difference between the average value of the account and EUR 1,000,000.00. The average value of taxable instruments is determined by (i) add up the value of taxable instruments at each of the reference point at which the account existed (ii) dividing the total obtained by the number of reference points. Example: a value of EUR 1.5 million at the first reference point, EUR 2 million at the second reference point and EUR 1 million at the third reference point gives an average value of EUR 1.5 million i.e. [EUR 1, 5 million + EUR 2 million + EUR 1 million] / 3. The tax on securities accounts will therefore be equal to EUR 2,250 (EUR 1.5 million * 0.15%).
What is the reference period and what are the reference points? A reference period is a 12-month period that begins on October 1st of one year and ends on September 30th of the following year. The reference points are December 31th, March 31th, June 30th and September 30th. With the law taking effect on February 26th, 2021, the first full reference period has a special duration. It began on February 26th, 2021 and ended on October 1st, 2021. It has three reference points: March 31th, 2021, June 30th, 2021, and September 30th, 2021. A new reference period began on October 1st, 2021. It will end on September 30th, 2022. Only the reference points at which the account existed are taken into consideration for the calculation. For example, for an account opened in January, there are only 3 reference points that are taken into account: March 31st, June 30th and September 30th. The opening and closure of a securities account do not constitute reference points.
What happens if I close my securities account? In case of closing a securities account, the reference period ends earlier. The tax is calculated over a special reference period, which runs from October 1st to the day when the account is closed. Only the reference points where the account existed are taken into account for the calculation of the tax. Example: If an account is closed on January 1st, 2022, the tax will be calculated over a special reference period that runs from October 1st, 2021 to January 1st, 2022. It will include only one reference point: December 31th, 2021.
What happens if my country of tax residence changes as a result of a relocation? In the event of a move from Belgium to a country that has signed a double taxation treaty with Belgium covering both income and assets (see above the question "I am not a Belgian tax resident, am I concerned?"), the tax will be calculated over a special reference period running from October 1st to the date of the relocation. Please note that this only applies if all account holders move to a country for which the exemption applies. As long as one of the account holders is a Belgian tax resident, or a resident of a country that does not benefit from the exemption, the account remains taxable. The move of one of the holders to an exempt country does not therefore create a special reference period. This is only the case when the last holder who is a tax resident of a non-exempt country moves from that country to an exempt country.
What financial instruments are subject to the tax on securities accounts? Almost all financial instruments held on a securities account are subject to the securities account tax (shares, bonds, certificates, warrants, trackers, swaps, options, etc.). Cash (EUR or foreign currency) held on the securities account are also considered taxable financial instruments. Registered shares are not considered taxable financial instruments.
What are the anti-abuse provisions? A specific anti-abuse mechanism was planned, introducing an irrefutable presumption (impossible to prove otherwise) of tax abuse in certain cases. This was annulled by the Constitutional Court.
Were targeted by anti-abuse provisions, among others:
- the splitting of a securities account whereby securities are moved to one or more accounts with the same financial institution or to accounts with another financial institution with the aim of avoiding that the total value of securities on one account exceeds EUR 1 million;
- the opening of securities accounts whereby securities are distributed between accounts with the same financial institution or with another financial institution with the aim of avoiding that the total value of securities on one account exceeds EUR 1 million;
- the conversion of taxable financial instruments held on a securities account into nominative financial instruments; ? the housing of a securities account subject to the tax in a foreign legal entity that transfers the securities to a foreign securities account;
- the lodging of a securities account subject to the tax in a fund of which the units are nominative. In some of the above cases, the operation is presumed to be abusive, without the taxpayer being able to prove otherwise (irrefutable presumption of tax abuse). In other cases, the taxpayer may be able to prove that the transaction is not solely for tax purposes.
Where can I find the report on the tax on securities accounts? The document "Tax Trading Account - Report 2021" is to be found in the tab "documents" of the trading account concerned. Log in on the transaction site, open "Investing" and click subsequently on the trading account > details > tab "Documents". If there is no report there, the value of your securities account did not exceed the EUR 1 million threshold at any of the reference points during the reference period.
How can I declare and pay any tax due? If the report shows that the average value of taxable financial instruments is less than EUR 1 million, no tax is due. If an amount of tax is due, it will be automatically debited from your securities account (the securities account with the number mentioned on the report) on Thursday November 25th, 2021. Check whether there is sufficient cash (in EUR) on that securities account to pay the amount of tax. If not, transfer as soon as possible to this account the exact amount of tax due (see the point : how to wire some cash on my trading account to pay the taks?).
Can I choose the account where the tax will be deducted? You cannot choose from which account the tax amount will be deducted. The amount will be deducted from the securities account with the number mentioned on the report. This is the trading account to which the tax applies. The deduction will be made on November 25, 2021. Please ensure that sufficient cash is available in that trading account on that date.
How to wire some cash on my trading account to pay the tax? Please note that a transfer to the securities account concerned by the tax can only be made from an account at Keytrade Bank (savings account, securities account, current account) opened in the name of exactly the same holder(s) as the trading account concerned. You want to pay the amount of the tax from another account (for example an account opened with another bank, or a current account at Keytrade Bank that you have in common with another person)? In that case, you must first transfer the amount to the current account opened at Keytrade Bank in the name of the same holder(s) as the securities account concerned by the tax. You can then transfer it from that current account to the securities account concerned by the tax.