The Belgian tax administration has issued on 25 May 2018 a (welcomed) Practice Note providing further guidance regarding the Belgian Tax on Securities Accounts (BTSA). For recall, the BTSA applies to (foreign) individuals holding one or several (Belgian) securities accounts which totalized (on average) more than 500.000 euros during the reference period. In such a case, eligible financial instruments are in principle subject to a yearly 0,15%-tax that must or can be withheld by the financial intermediary. Since its adoption, the BTSA has generated a lot of technical and operational questions, especially from the financial intermediaries.
A noticeable clarification in the Practice Note concerns the notion of ‘holder’ and a.o the application of the BTSA to accounts held by companies or associations without legal personality. In this respect, the Belgian tax administration confirms that a look-through approach should be followed in order to identify the actual holders of the securities accounts concerned for the purpose of the application of the BTSA (this should however not concern associations ‘in fact’ where the members do not have a right to the association’s estate).
The Practice Note also provides further guidance with respect to (i) the financial instruments in scope, (ii) the reference periods (incl. in case of external transfers), (iii) the valorization, (iv) the formalities related to the reporting, the payment and the refund request of the BTSA and (v) the reporting obligation in the personal income tax return. Most of these points are illustrated by concrete examples, which is also welcome.
Despite the extensive character of this Practice Note, some aspects of the BTSA still remain uncertain or unclear, be it from a technical or an operational point of view. This includes, for instance, the question of the application of the effect deferral rule on the conversion of units / shares of a fund into the nominative form, which is not tackled in the Practice Note. More generally speaking, we can see that a lot of discussion points are due to concepts which are not always easy to combine (e.g. notions of holder vs. taxpayer) or mere inaccurate translations (e.g. notion of shares in the French or Dutch texts).
The stakeholders concerned (taxpayers, intermediaries, etc.) should carefully consider this Practice Note and take the appropriate actions, including from an operational perspective. Outstanding unclear or uncertain points should also be identified and cleared. We however remind that a (double) application for annulment is currently pending at the level of the Belgian Constitutional Court. With an extensive experience and expertise on this matter, PwC can of course provide support for any kind of questions or projects related to the BTSA.