In the declaration of intent, the new Belgian government announced that a fair contribution would be asked from the persons with the most financial strength, with respect for entrepreneurship.
Please find below an overview of the proposed solidarity tax (under reservation).
Sooner than expected, the successor of the tax on securities accounts (as annulled by the Belgian Constitutional Court) is in the pipeline, the so-called “solidarity tax”.
Solidarity Tax
The solidarity tax will be a subscription tax levied on the securities account itself and not on the holder of the securities account.
Both securities accounts held by natural persons and securities accounts held by companies fall within the scope of application.
All securities, registered shares excluded
All securities held on the securities account are targeted (such as shares, bonds, participations in investment funds and investment companies), but also derived products (such as index trackers, turbo’s and real estate certificates).
Considering the respect for entrepreneurship, registered shares remain out of scope. The shares of an entrepreneur’s company that are registered in the company’s share register will therefore be excluded from the tax.
The threshold: securites' value of €1.000.000 or more
The tax is due on securities accounts holding securities with a value of €1.000.000 or more.
The threshold is therefore doubled in comparison to the (annulled) tax on securities accounts, for which the threshold was set at €500.000 per account holder.
From a practical perspective, it cannot be precluded that only one reference date will be considered (cfr. Dutch system).
Tax rates: 0.15%
The tax rate amounts to 0,15% and is calculated on the value of the taxable securities. The tax rate is the same as the tax rate of the tax on securities accounts.
The solidarity tax will therefore amount to €1.500 per year for a securities accounts including securities with a value of €1.000.000.
As it concerns a subscription tax on the securities account itself, different securities accounts held by the same account holder will no longer be added together. The solidarity tax will therefore not be due on a securities account including taxable securities with a value of €600.000, even if the account holder holds another securities account including taxable securities of €800.000 (except for abuse – see below).
Securities accounts held by foreign legal structures targeted by the Cayman tax
Securities accounts held by foreign legal structures that are targeted by the Cayman tax will also fall within the scope of application of the solidarity tax. It mostly concerns foreign securities accounts held by low taxed foreign companies and entities of which the shareholder or founder is a Belgian resident.
Securities accounts held by a Luxembourg société de gestion de patrimoine familial, of which the shares are held by a Belgian resident could therefore fall within the scope of application.
Scope of application
The following securities accounts appear to fall within the scope of application:
- Belgian and foreign securities accounts held by a natural person – Belgian resident;
- Belgian and foreign securities accounts held by a company established in Belgium;
- Belgian and foreign securities accounts held by a non-Belgian company or entity that is targeted by the Cayman tax. The Cayman tax is applicable to foreign low taxed companies and other entities of which the shareholder or founder is a Belgian resident
- Belgian securities accounts held by a natural person non-Belgian resident;
- Belgian securities accounts held by a company established outside Belgium.
Branch 23 life insurances
Securities accounts linked to a Branch 23 life insurances can also fall within the scope of application, as no exemption is included in the solidarity tax.
Entry into force?
Given the current circumstances, it is expected that the bill will enter into force shortly. Unless indicated otherwise, the bill will enter into force within 10 days following the publication in the Belgian Official Gazette.
The text of the draft bill has been discussed today by the council of ministers and has been sent to the Council of State.
Anti-abuse provision
As indicated above, the solidarity tax is a subscription tax levied on securities accounts.
One securities account including taxable securities of €1.200.000 will therefore fall within the scope of application. Six securities accounts, each including taxable securities with a value of €200.000, will not fall within the scope of application, even if the securities accounts are held by the same account holder.
The draft bill adopts the anti-abuse provision as included in the Belgian Income Tax Code. Dividing taxable securities over multiple securities accounts to lower the taxable value will therefore be considered as tax abuse, unless the account holder can demonstrate other motives than the avoidance of the solidarity tax (eg a gift to his or her children).
Banks would be held co-responsible. Question is however to what extent the Belgian government can hold foreign banks co-responsible.
Discrimination
The fact that the solidarity tax concerns a subscription tax (and not a tax levied in the hands of the account holders) is inspired by the motivation for the annulment of the tax on securities accounts. The same goes for the fact that now all securities are targeted.
As registered shares are excluded from the scope of application, the question raises whether the qualification of the solidarity tax as a subscription tax, linked to securities accounts, can avoid an annulment by the Belgian Constitutional Court based on discrimination.
Moreover, question is whether the threshold of €1.000.000 is not arbitrary and discriminatory.
To be continued
We will of course follow up on the solidarity tax and will keep you updated!
