New Capital Gains Tax: Curious Differences in Treatment for NPO Taxpayers

The new capital gains tax regime, which should apply to transactions carried out from 1 January 2026, applies not only to Belgian resident individuals, but also to the vast majority of Not-for-Profit taxpayers subject to legal entities income tax (A(I)SBL, Foundations, etc.). We are not examining here the section applicable to capital gains on major holdings (at least 20%) in unlisted companies, which is unlikely to be encountered in practice. It is the other part of the regime, which subjects capital gains realized on various financial assets to a 10% tax, with an exemption of €10,000 per annum (to be indexed, if the legislator so decides) and the possibility of deducting capital losses incurred during the same taxable period, that interests us. Generally speaking, the taxation system is identical to that which will apply to "residents of the Kingdom", i.e. to the Individual income tax.  But it is in the method of taxation that differences appear.

No intermediary in Belgium: pay the withholding tax yourself, on a lump-sum base

Firstly, this is the case when capital gains are realised without the intervention of an intermediary established in Belgium. In this case, the tax cannot be levied by way of withholding tax, and individuals will have to mention the amounts realised in this way in their annual tax return. On the same form, they will be able to claim exemption for the first €10,000 (which may be increased, under certain conditions, to €15,000) and deduction of capital losses incurred during the same period. The situation is different for taxpayers subject to the Legal entities income tax: they will be required to pay the tax themselves, in the form of withholding tax, within a specific timeframe (within 15 days of the end of the taxable period). However, to determine the amount of this withholding tax, the legal texts that we have been able to read at this stage indicate that the calculation will be the same as for individuals. This method of calculation, which is largely flat-rate, takes no account of the €10,000 exemption, nor of capital losses incurred during the same period, nor of an acquisition value greater than the value of the assets at 31.12.2025. It is therefore only at a later stage that the NPO taxpayer will be able to claim these benefits. The justification for determining the amount of the withholding tax on a flat-rate basis is a - quite laudable - concern to simplify matters for intermediaries established in Belgium, who will not have to worry about these particularities in their calculations. But this is where the problem lies: this justification disappears when it is the taxpayer himself who can and must calculate the withholding tax: he is in fact, by definition, in the best position to determine his definitive tax regime with regard to the tax, having regard to the transactions he has carried out during the past year. He will have the necessary oversight since, remember, the withholding tax must be paid after the taxable period. Consistency would therefore dictate that either taxpayers subject to the IPM should be exempt from the obligation to apply a flat-rate withholding tax to themselves and to mention their capital gains in their annual return form, or that, in determining the amount of the withholding tax, the three aforementioned advantages should be taken into account.

Opt-out? Not allowed

The second difference in treatment - which leans even more radically towards discrimination if it is proven - concerns the possibility for taxpayers to request an "opt-out" from intermediaries established in Belgium, who are required to deduct the withholding tax on capital gains in which they are involved. Following this request (to be made to all the intermediaries concerned), the intermediaries do not deduct withholding tax, and it is up to the taxpayer to declare the taxable amounts in the annual return. On this occasion, the taxpayer may claim that the exemption, capital losses incurred during the taxable period and a higher acquisition value than that fixed at 31.12.2025 should be taken into account. However, again in the draft texts currently available for consultation, this opt-out possibility is only open to "Rijksinwoners" (in the Dutch text; the French text refers generally to "taxpayers"), i.e. natural persons, a restriction confirmed in the draft explanatory memorandum. No justification is given for this. It is hard to see what justification there could be for removing the right of A(I)SBLs and Foundations to request the opt-out.

Whether or not these differences in treatment are the result of an oversight, it is in the legislator's best interests to amend his plans in order to avoid being accused of discriminatory treatment.