By law of 7 February 2018, the legislator introduced a tax on securities accounts (“taks op de effectenrekeningen”/“taxe sur les comptes-titres”). Many petitions to annul this law have been introduced before the Constitutional Court. In its judgement dd. 17 October 2019, the Constitutional Court annulled the law (and thus the tax), but decided to maintain the legal consequences of the annulled provisions.
The tax on securities accounts
The tax on securities accounts was introduced by the law of 7 February 2018. According to this law, a tax of 0.15% was due on certain securities (stocks, bonds, warrants, …) held by:
- Belgian individuals on Belgian or foreign securities accounts, or;
- non-residents on Belgian securities accounts.
The tax was only due when the total average value of the qualifying financial instruments held via the above-mentioned securities accounts reaches or exceeds EUR 500,000 per account holder.
Annulment procedures before the Constitutional Court
Many petitions to annul the law introducing the tax on securities accounts have been introduced before the Constitutional Court.
The taxpayers invoked various arguments, e.g. infringements of European law (free movement of capital), infringements of the Belgian Constitution (principle of equality).
What did the Constitutional Court rule?
The Constitutional Court ruled that the law introducing the tax on securities accounts indeed infringes the Belgian Constitution. In particular, the Court ruled that the following different treatments by the tax on securities accounts, were not reasonably justified:
- certain types of securities were excluded from the tax (real estate certificates, certificates of deposits);
- only securities on securities accounts are envisaged and not e.g. nominal shares which do not appear in a securities account;
- under certain circumstances, account holders who hold a share that exceeds 500,000 EUR of the securities accounts, can escape the tax (when the securities account is held by more than 1 natural person).
Notwithstanding the above mentioned infringements, the Court decided to maintain the legal consequences of the annulled provisions for the taxes due for the reference periods ending before or on 30 September 2019, taking into account the budgetary and administrative implications of the annulment and the possible judicial proceedings.
What does this mean for you?
The Court thus annulled the law introducing the tax on securities accounts, but only for the future, i.e. as from 1 October 2019.
Notwithstanding the limitation of the legal consequences, retroactive reimbursement of the paid tax on securities accounts could possibly be obtained through legal proceedings.
For questions or information you can always contact the undersigned.