On 1st February 2018, the Belgian Parliament approved the law implementing a tax on securities accounts, which should be published in the Official Gazette in the next days.
In a nutshell, this regime provides a 0,15%-taxation of securities accounts held by individuals, either Belgian residents or non-residents (in such a case, only on their ‘Belgian’ securities accounts), when their average and combined value exceed 500.000 EUR (several techniques are provided to assess the value of the financial instruments).
The categories of financial instruments to be considered – to assess this threshold and apply the tax – are listed in the law and among others include shares, bonds and units of investment funds, quoted or not. A specific exemption has been provided for the units of investment funds held in the framework of life insurances and pension plans.
This new tax is quite technical and its consequences, also from a practical and an operational perspective, should be carefully assessed. This is particularly true in case of co-ownerships, dismemberments and discontinuity situations (e.g. transfers IN and OUT).
In this framework, we would like to draw your attention to the few following characteristics:
The tax works on an “all or nothing” basis, once the threshold of 500.000 EUR is reached;
As key stakeholders for the functioning of this tax, the (Belgian) intermediaries are subject to specific reporting and withholding obligations;
In line with the recent extension of the tax on stock exchange transactions, foreign players will also have the possibility to report and pay the tax on behalf of their (Belgian) clients;
Individuals are also subject to specific reporting obligations (e.g. multiple securities accounts) and, possibly, liable to pay the tax;
Specific anti-abuse rules have been put in place to avoid (i) conversions of certain financial instruments into a registered form and (ii) certain transfers of portfolios to legal persons.
Again, this only constitutes a glimpse of the various aspects of this tax. Investors and financial institutions concerned, including those operating from abroad, should gain a proper understanding of the tax to ensure that solutions and communications potentially required are identified and put in place.
Of course, PwC remain at your disposal should you require assistance at any of these phases.