Recently, a new tax regime relating to capital gains on shares has been introduced (Program Law of 27 December 2012). Under the new tax regime certain capital gains will be subject to a separate corporate tax rate of 0.412% (including additional crisis surcharge). This new tax is a fixed tax: the capital gains cannot be reduced with any deductions nor offset against losses. The new tax regime will be applicable as from tax year 2014.
Up till now the capital gains on shares were - as a general rule - fully exempted if the two following conditions were met: (i) the shares have been issued by companies subject to a normal tax regime (the Taxation condition) and (ii) the shares have been held in full ownership during an uninterrupted period of one year (the Holding condition).
The exemption remains fully applicable for SMEs ("Small and Medium sized Enterprises"), but other companies fulfilling the two conditions will be subject to the new tax. SMEs are defined in article 15 of the Belgian Company Code as companies with legal personality that do not exceed more than one of the following thresholds:
- annual average number of employees: 50
- annual turn-over, excluding VAT: EUR 7,300,000.00
- balance sheet total: EUR 3,650,000.00
Moreover, a company with an annual average number of employees of more than 100 is not considered as SME. For companies that are considered as "affiliated with another company" (according to article 11 of the Belgian Company Code), their respective employees are added together and the annual turnover and the balance sheet criteria are determined on a consolidated basis.
- The current tax regime of capital gains realised or recorded by a company can be summarized as followed:full exemption for capital gains on shares realised by SMEs if both the Taxation condition and the Holding condition are met;
- taxation at 0.412% for capital gains on shares realised by companies other than SMEs if both the Taxation condition and the Holding condition are met;
- taxation at 25.75% for capital gains on shares if the Taxation condition is met, but not the Holding condition;
- taxation at the standard corporate income tax rate of 33.99% for capital gains on shares if the Taxation condition is not met (regardless of the Holding condition).
The tax regime relating to capital gains realised by physical persons remains unchanged. The principles hereof will be restated in a separate e-zine.
