The tax applies to:

• Natural persons who are subject to personal income tax in Belgium
• Unincorporated associations and entities with joint ownership of property
• Certain legal entities subject to the tax on legal entities (mainly non-profit organisations, foundations and private foundations) – an exception is made for entities that are able to receive gifts for which a tax reduction applies

This means that the tax does not apply to:

• Companies
• Natural persons and legal entities that have their tax residence abroad

The capital gains tax has a very broad scope of application. It covers different types of both Belgian and foreign financial products, including shares, bonds, funds, options, trackers, ETFs, warrants, savings-linked insurance, investment-type insurance, gold, foreign currency and crypto assets, both listed and unlisted.

Capital gains tax does not apply to:

• Group insurance
• Long-term savings plans
• Pension savings and other types of non-statutory pension accrual

1. Capital gains

The capital gain is the difference between the amount you receive when selling the product and the amount you paid when purchasing the product. As the new tax entered into force on 1 January 2026, only capital gains accrued on or after that date will be affected. To determine the price of products you have bought before that date, we look at the value of the product on 31 December 2025 (known as the ‘snapshot value’).

Deduction of costs or taxes to reduce the realised capital gain is not permitted.

Example
You bought a share in 2023 at a price of 100 euros, and sell it on 15 September 2026 for 150 euros. Over the entire period, you therefore realise a capital gain of 50 euros. However, the price of the share on 31 December 2025 was 120 euros. As a result, you pay only 10% of 30 euros (150 euros - 120 euros) in tax.

2. Capital losses

It is possible that in addition to capital gains in a given year, you also realise capital losses. You can deduct these capital losses from the capital gains you realised in the same year, across different types of investments. 

Important limitations:

• Capital losses are only deductible in the same year
• They cannot be carried over from one year to the next
• The offset is claimed through your tax return
• If KBC Brussels or another intermediary withholds the tax at source, no account is taken of capital losses
• Only losses arising on or after 1 January 2026 may be set off

When calculating a capital loss, we always use the value on 31 December 2025 (known as the ‘snapshot value’). Anything that happened before that date is no longer taken into account. This also means that historical losses (losses realised up to and including 31 December 2025) cannot be deducted from capital gains realised in that income year.

Example

• You bought a share in 2022 for a price of 150 euros
• Its value on 31 December 2025 was 100 euros
• You sell the share in 2027 for 80 euros

The capital loss is 100 euros - 80 euros = 20 euros

The loss of 50 euros (150 euros - 100 euros) cannot be set off against a realised capital gain on another investment in 2027.

 The capital loss of 20 euros can be set off against your realised capital gain from the same calendar year.

Example of annual offsetting of capital gains and losses

In 2027, you realise a:

• Capital gain on sales: 25 000 euros
• Capital loss on other sales: 3 000 euros

Net taxable capital gain:
25 000 euros - 3 000 euros = 22 000 euros (leaving aside any exemptions)  

3. Historically higher acquisition value

You may take into account your historical purchase price, i.e. the price you paid before 31 December 2025.

If you have made multiple purchases of the same security, you apply the average purchase price.

You may use the most favourable value when calculating the capital gain:

• The historical acquisition value
• Or the snapshot value on 31 December 2025

Some other points to consider:

• The historical acquisition value may be used temporarily for sales on or before 31 December 2030
• You are responsible for declaring the capital loss and the historical acquisition value in your tax return
• The taxable capital gain will be reduced to a maximum of 0 euros (you may not make a loss)

Example

• Purchase in 2023: 150 euros
• Snapshot value on 31 December 2025: 120 euros
• Sale in 2026: 125 euros

Excluding the historical acquisition value: 125 euros - 120 euros = 5 euros of taxable capital gain

Including the historical acquisition value: 125 euros - 150 euros = no profit, 0 euros of taxable capital gain

4. What about purchases at different times?

If the same product was purchased at different times, the calculation of the capital gain is based on the securities purchased first (FIFO principle: first in, first out). This means that, for the calculation of the capital gains tax, the product purchased first is also the first product to be sold.

Example

• 2026: purchase of 10 shares for a price of 100 euros
• 2027: purchase of 20 shares for a price of 120 euros
• 2028: sale of 15 shares for a price of 150 euros

Capital gain on the sale in 2028:

• Sale of 10 shares purchased in 2026 (150 euros - 100 euros) × 10 = capital gain of 500 euros
• Sale of 5 shares purchased in 2027 (150 euros - 120 euros) x 5 = capital gain of 150 euros
• Total taxable capital gain = 650 euros
• Tax payable: 65 euros (10% of 650 euros)
  

1. Capital gains

For savings-linked and investment-type insurance products (guaranteed-interest life insurance (class 21) and unit-linked life insurance (class 23)), we look at the difference between the current value of your investment and the total amount you have invested over time.

The new tax applies as from 1 January 2026. For amounts invested before then, the value of the entire investment in your insurance contract on 31 December 2025 will be used. This snapshot value constitutes the basis for the calculation.

Capital gains tax is not applicable in the event of a distribution due to the death of the insured.

Example
Your investment is worth 120 000 euros today. The snapshot value on 31 December 2025 was 100 000 euros.

• Taxable capital gain = 120 000 euros - 100 000 euros = 20 000 euros
• Tax = 10% of 20 000 euros = 2 000 euros

2. What if you only withdraw a part of your investment?

If you withdraw just part of your investment, a proportionate amount of your total capital gain will only be taxed as well.

Example
Your investment is worth 100 000 euros. Your total capital gain is 20 000 euros.
You withdraw 30% of that amount.

• Taxable capital gain = 30% of 20 000 euros = 6 000 euros
• Tax = 10% of 6 000 euros = 600 euros

3. Capital losses

It is possible that in addition to capital gains in a given year, you also realise capital losses. You can deduct these capital losses from the capital gains you realised in the same year, across different types of investments. They cannot be carried over from one year to the next.

As capital gains are taxed as from 1 January 2026, capital losses can also be deducted from that date.
You can only set off capital losses in your tax return. If, as intermediary, KBC Brussels withholds the 10% capital gains tax for you, it may not take into account the capital losses you have realised.

Example
In 2027, you realise a total capital gain of 25 000 euros by selling various investments. You also sell some investments in the same year on which you realise a total loss of 3 000 euros.
The net taxable capital gain is then 25 000 euros - 3 000 euros = 22 000 euros (leaving aside any exemptions).

4. Historically higher acquisition value

If the value of your previous purchase was higher than the snapshot value on 31 December 2025, you may apply the higher purchase price instead of the snapshot value.

This option only applies to sales on or before 31 December 2030, and you must state this higher purchase price in your tax return.

However, using a historically higher acquisition value can never result in realising a capital loss. The taxable capital gain will then be reduced to 0 euros.

Example
The purchases you made prior to 2026 amount to 120 000 euros, the snapshot value is 100 000 euros. In 2027, your investment is worth 110 000 euros.
You may use 120 000 euros as the basis for the calculation, meaning that the taxable capital gain is 0 euros.

5. What about purchases made at different times?

For savings-linked and investment-type insurance products, your investment is taken as a whole for the calculation. There is, therefore, no need to apply the FIFO (first in, first out) principle or to perform a separate calculation each time a purchase has been made.

Example
You invested 20 000 euros in 2026, 30 000 euros in 2027 and 10 000 euros in 2028 (60 000 euros in total). In 2029, your investment is worth 75 000 euros.

• Capital gain = 75 000 euros - 60 000 euros = 15 000 euros
• Tax = 10% of 15 000 euros = 1 500 euros

1. How is the capital gains tax applied to securities in foreign currencies?

For financial products in foreign currencies, the law provides that both the purchase price and the sale price must be converted into euros using the exchange rate on the day of purchase and sale to calculate the taxable base. This ensures that not only the capital gain on the security itself but also the capital gain on the exchange rate is taken into account for the capital gains tax.

The financial institution is responsible for calculating the correct taxable base for securities in foreign currencies.

Example

• You buy 100 US shares for a price of 50 dollars each. At the time of purchase, 1 euro is equal to 1.10 US dollars. This means that the price in euros is 4 545 euros (5 000 dollars = 4 545 euros at that time).
• You later sell the shares for a price of 60 dollars each. At that time, 1 euro is equal to 1 US dollar, which means that you receive 6 000 euros.
• The exchange rate difference results in a total gain of 1 455 euros (sale price of 6 000 euros minus the purchase price of 4 545 euros). This is more than your gain per share in dollars (1 000 dollars).
• Consequently, the taxable capital gain is 1 455 euros, with an effective tax of 145.50 euros (10% on 1 455 euros).

2. What about cash in foreign currencies?
The taxpayer is legally obliged to personally declare any capital gains realised on foreign currencies held in an investor’s account, time deposit account or Bolero account in their tax return.

The capital gains must be calculated using the FIFO (first in, first out) principle. The amount deposited into the account first must also be used first to finance a payment, for example.

As this specific provision is still subject to change, we will inform you about the final calculation method at a later date.

3. What happens if you transferred securities from another bank?

We need to know the price you purchased your securities at and the date you purchased them on in order to calculate the capital gains tax correctly. You will find this information in a portfolio statement, a MiFID report or your purchase statement. If you don’t provide us with this information, we will calculate the capital gain on the full sale price.

Some banks have committed themselves to forwarding this information upon a transfer of securities. If your bank is in the list, you don’t have to provide this information yourself. The list will be updated in the future and can be viewed here.

4. What is the Reynders tax?

The Reynders tax is a tax of 30% on the ‘capital gain’ on certain investment funds that invest fully or partially in bonds.
The law provides for a specific method of calculating the new capital gains tax for funds that are subject to the Reynders tax.

So, when selling an investment fund subject to this tax, you are liable to two taxes:

• 30% withholding tax on the return on the bond component
• 10% capital gains tax on the return of the share component

Example
You buy into a fund in 2026 for a price of 2 000 euros. You sell this fund in 2028 for 2 500 euros. The capital gain is then 500 euros.

Say that the TIS (i.e. the part of the gain derived from the interest component) was 120 euros at the time of purchase and 160 euros at the time of sale, the difference (160 euros - 120 euros = 40 euros) is subject to the Reynders tax of 30%.

So, when selling this fund, you pay the following total amount:

• Reynders tax: 30% of 40 euros = 12 euros
• Capital gains tax: 500 euros - 40 euros = 460 euros. 10% of 460 euros = 46 euros
• Total tax: 58 euros
  

5. What about bonds?

The rules for calculating investment income and withholding tax deductions remain unchanged, but there are certain details bond investors should be aware of.
 

One type of tax per income

Income from bonds can be taxed in different ways:

• Withholding tax (WHT) on interest income
• Capital gains tax upon sale or redemption

Income is never taxed twice, so you won’t pay both withholding tax and capital gains tax on the same income.
 

Sale and redemption of bonds

The sale of a bond may be subject to capital gains tax. The redemption of a bond at maturity is also considered a sale for tax purposes.

• If you buy a bond for less than the issue price (below par) but you receive the full redemption price at maturity,
  that means you realise a capital gain on the difference between the issue price and the full redemption price. The coupon is still subject to 30% WHT.
• If you buy a bond above par and is it redeemed on par,
  that means you realise a capital loss on the difference between the above-par price and the full redemption price. Once again, the coupon is subject to 30% WHT.
   

The importance of the purchase and sale price

• For bonds purchased after 31 December 2025, the actual purchase and sale price is used.
• For older purchases, in principle the price on 31 December 2025 applies, unless you wish to use a higher acquisition value. In that case, you can arrange this yourself in your tax return.
   

Bonds in foreign currencies

When you invest in bonds denominated in another currency, in addition to the gain or loss on the bond itself, you can also realise a gain or loss on the foreign currency.

Two reference points are used to calculate the capital gain or loss on the exchange rate:

• The starting value of the currency
  • If the bond was purchased after 31 December 2025, the exchange rate on the date of purchase will be the starting value.
  • If the bond was purchased before 31 December 2025, the exchange rate on 31 December 2025 will be the starting value.
• The closing value of the currency
  This is the exchange rate on the date of sale or maturity.

The difference between these two exchange rates determines the realised capital gain or loss on the foreign currency.

Your total capital gain or loss combines both.

Every taxpayer is entitled to an annual exemption. No capital gains tax is payable on the first 10 000 euros of capital gains realised. This amount is indexed annually. You need to arrange this exemption in your personal tax return.

In addition, you can carry forward a limited proportion of the exemption you don’t use to the following year. For each year that you don’t make use of this exemption, you can carry forward up to 1 000 euros to a subsequent year, up to a maximum of five years. This makes it possible for each taxpayer to claim a maximum exemption of 15 000. A married couple could therefore end up with a joint basic exemption of 30 000 if they carry forward the full exemption amount (assuming their investments form part of their joint assets).

Example 1

You don’t realise any capital gains in the first two years. As a result, you can carry forward an exemption amount of 1 000 euros twice, and by 2028 your exemption has increased from 10 000 to 12 000 euros.

In 2028, you realise a capital gain of 20 000 euros. Your exemption is 12 000 euros, which reduces your taxable capital gain to 8 000 euros. Since you have now used the full exemption, no exemption amount can be carried forward to the next year.

Example 2

You didn’t realise any capital gains in the first year and you can carry forward the exemption of 1 000 euros to the next year.

In 2027, you realise a capital gain of 7 500 euros. You first use the exemption amount of 2026 that was carried forward and then 6 500 euros of your basic exemption. Since you have now used the first tranche of 1 000 euros of your exemption, no exemption amount can be carried forward to the next year.

In 2028, you realise a capital gain of 12 500 euros and your exemption is 10 000 euros (your basic exemption), which means that your taxable capital gain is reduced to 2 500 euros. Since you have now used the full exemption, no exemption amount can be carried forward to the next year.

1. How do you pay capital gains tax after 1 June 2026?

The law provides two ways to pay capital gains tax: 

Option 1: Declare everything yourself (opt-out)

• You opt for KBC Brussels not to withhold any capital gains tax.
• You can make this choice per custody account or insurance contract.
• You are personally responsible for declaring the realised capital gains in your tax return. In doing so, you are entitled to an exemption.
• We report your choice to the tax authorities and provide you with a statement detailing your realised capital gains.
• We provide the tax authorities with an overview of the capital gains you realised after 1 June 2026.
• Your choice is valid for full-year 2026 (if you want to change your choice, it will only take effect from the following year)  

How do you make this choice?

• You will have to wait until November to submit your request in KBC Brussels Mobile or KBC Brussels Touch to opt out for 2027.
• You had until 28 May to submit your request in KBC Brussels Mobile or KBC Brussels Touch to opt out for 2026. Opting out for 2026 is only possible in exceptional cases and should be requested at your KBC Brussels branch. Contact your KBC Brussels branch or KBC Brussels Live for more information.

Option 2: Automatic deduction (withholding tax)

• If you don’t opt out, KBC Brussels will automatically deduct 10% capital gains tax when you realise a gain on selling an investment (that will only happen for capital gains you realised on or after 1 June 2026)
• We will transfer that amount anonymously to the tax authorities
• If you decide to use the exemption, you can claim back the amount paid in your tax return (we’ll provide you with a statement for this purpose)

How do you make this choice?
You don’t have to do anything for this option.

Tax cannot be deducted at source for certain financial products (such as capital gains on crypto assets, foreign currency and gold). For these products, you are responsible for declaring any capital gains in your personal tax return.

For securities that you hold outside Belgium, you will also have to declare the realised capital gains yourself in your personal tax return.

For non-profit organisations and foundations, the system of deducting the tax at source does not apply; instead, payment of the capital gains tax is arranged directly through the legal entities’ withholding tax return.

Hold an account jointly with other people?
Every account holder has to make the same choice (declare everything yourself or opt for automatic deduction).

2. How do you pay capital gains tax realised during the transitional period from 1 January 2026 to 31 May 2026?

The tax applies from 1 January 2026, but a transitional arrangement applies until 31 May 2026.

The legislature provides the option to pay the 10% capital gains tax built up during the transitional period through your bank. Starting from late August 2026, we will let you know how you can arrange payment of the capital gains tax. Until then, you don’t have to do anything.

• If you’ve opted for the tax to be deducted automatically, KBC Brussels will start deducting the tax from 1 June 2026. You don’t need to do anything.
• If you chose to opt out, this choice will also apply during the transitional period.
  

The capital gains tax applies from 1 January 2026; we use the snapshot value of 31 December 2025 to calculate the capital gain.

The snapshot values are conveniently listed in the document ‘Overview of Securities on Account. For your investment-type insurance policies, you will find the value in the annual report of your policies.

How would you like to pay the capital gains tax?

• If you opt for the tax to be withheld, you don’t have to do anything.
• Prefer to opt out? 
  • In that case, you will have to wait until November to submit your choice for 2027 in KBC Brussels Mobile or KBC Brussels Touch.
  • You had until 28 May to submit your request in KBC Brussels Mobile or KBC Brussels Touch to opt out for 2026. Opting out for 2026 is only possible in exceptional cases and should be requested at your KBC Brussels branch. Contact your KBC Brussels branch or KBC Brussels Live for more information.

In 2027, we will provide you with a personalised statement specifying the capital gains and losses you realised in 2026. You can use that document to fill in your tax return.

Where a private individual realises a capital gain when selling shares, the first question that arises is whether the transactions fall within the definition of ‘normal management of private assets’. ‘Normal management’ is traditionally defined as ‘acts performed by a prudent and reasonable person for the purpose of day-to-day management, but also with a view to the profitability, realisation and reinvestment of elements of their assets’.

Criteria used in the case law to assess whether the realisation of a capital gain is part of the normal management of private assets include the amount of the capital gain, the short period within which the shares were purchased and sold, the intention to make considerable profits in the short term (speculation), the means of financing and any guarantees, the presence of economic motives, the reasons for selling, the financial strength of the buying company, etc.

If transactions do not fall within the framework of ‘normal management’ (and are therefore classed as ‘abnormal management’), realised capital gains are deemed to be ‘miscellaneous income’ and subject to a tax rate of 33% (+ supplementary local tax). In that case, the taxable capital gain is calculated as the positive difference between the price received and the price at which the shareholder (or the shareholder’s legal predecessor) has obtained these shares for valuable consideration (revalorised, where appropriate). The question of whether or not a transaction falls within the definition of ‘normal management’ is obviously a question of fact, on which only a court can provide a definitive ruling.

In the past, the tax authorities generally disputed capital gains realised by a natural person when selling shares to another company (holding company) incorporated or controlled directly or indirectly by this natural person, since this type of ‘internal capital gain’ was not deemed to fall within the definition of ‘normal management’ of private assets. However, the judgment regarding ‘normal management’ can only be made by a court with jurisdiction over the substance of the matter, and the case law is more ambiguous on this point.

The term ‘abnormal management’ and the possible requalification of a capital gain as miscellaneous income continue to exist after the introduction of the current capital gains tax on financial assets, which means that this capital gain may still be taxed as miscellaneous income.
The capital gains tax that is now introduced only applies where transactions are part of the normal management of private assets and are not carried out as part of a professional activity.

Where a shareholder realises a capital gain when selling shares, it should always be checked first whether this is an ‘internal capital gain’. An internal capital gain is realised when shares are sold to a company that is controlled by the seller, alone or together with their family (spouse, legally cohabiting partner, and relatives and collateral relatives to the second degree of the transferor and of their spouse or legally cohabiting partner).

Internal capital gains will be taxed at a separate rate of 33%. A capital gain is defined as the difference between the sale price received and the snapshot value.

We stress that this refers only to internal capital gains that are deemed to fall within the framework of the normal management of private assets. As indicated in the ‘abnormal management’ section, a requalification as miscellaneous income may still be made on the basis of all relevant facts in an individual file. In the latter case, supplementary local tax will also be due on the capital gain and the historical capital gain will be subject to taxation as well (it is highly likely that, under the new regime, the historical capital gain will also be exempt where internal capital gains have been realised).

Please note: in principal, capital gains realised when contributing shares to a holding company will however still be tax-exempt. In fact, a specific regime applies for the contribution of shares, whereby the capital for tax purposes of the company which receives the contribution is limited to the acquisition value of the contributed shares. From a tax perspective, the net contribution is deemed to be a ‘taxed reserve’, which is subject to 30% withholding tax upon subsequent distribution.

Where a shareholder has a substantial interest in a company whose shares they sell (and there are no ‘internal capital gains’, see above), the capital gains tax rules will differ from the standard regime. This deviating rule aims to treat ‘owners’ of (family) businesses (which were often founded by themselves or by relatives from a previous generation) less harshly and is designed not to frustrate the entrepreneurial spirit of these ‘shareholder-entrepreneurs’.

For the purpose of this rule, a ‘substantial interest’ is defined as a participating interest of at least 20%. Only the shareholding held by the shareholder themselves and in their personal name is taken into account. The assessment of whether the holding size condition has been met is made at the time of the transaction. There is no ‘transitional regime’ for shareholders who do not reach the minimum threshold of 20%, but only own, say, 19% of a company’s shares; they will therefore fall under the ‘standard regime’ of 10% tax and a 10 000 euro basic exemption. Shareholders who own at least 20% of the shares will benefit from an exemption on a first tranche of 1 000 000 euros when realising a capital gain. This exemption will apply once per five-year period.

Higher capital gains will be taxed at a progressive rate (1.25% up to 2 500 000 euros; 2.5% up to 5 000 000 euros; 5% up to 10 000 000 euros; 10% for 10 000 000 euros and above). The capital gains tax applies to capital gains on shares of both listed and unlisted companies. For unlisted companies, the question naturally arises as to the ‘initial value’ of the shares (the ‘snapshot value’ on 31 December 2025). A number of options are given for determining this value. If a transaction (between independent parties) took place in 2025 (e.g., a sale of shares), the value used in that transaction can be used as the reference value (‘snapshot value’). In other cases, a flat-rate valuation method (four times EBITDA plus shareholders’ equity) can be used. You may also have a detailed valuation carried out by an auditor (other than your own auditor) or certified accountant (other than your own accountant). This valuation must be made no later than 31 December 2027. Taxpayers may choose the method that yields the highest valuation. However, in exceptional cases, the tax authorities have the option to dispute the value determined by the auditor or accountant.

For the sake of clarity, the scheme is not limited to shares of operating companies. It therefore also applies in principle to capital gains realised on the sale of shares of, for example, a family holding company, a management company or a holding company.

More information on capital gains tax for private investors.

More information on the annual tax on custody accounts.

More information on capital gains tax for entrepreneurs.

If a company pays dividends to shareholders who are natural persons, in principle 30% withholding tax is applicable. Using the VVPRbis tax reduction scheme (see below) and liquidation reserves, this tax burden can be reduced under certain conditions.

If a liquidation reserve is created, an additional 10% corporation tax is payable on the amount of the reserve. In exchange, the reserve can be distributed later at a favourable tax rate. The liquidation reserve regime was amended by the Programme Act of 18 July 2025 and the Programme Act of 30 May 2026. Under this legislation, a distinction must be made between liquidation reserves created before 31 December 2025 and reserves created after that date.

• Liquidation reserves created before 31 December 2025 can still be distributed (under the original regime) after a waiting period of five years at a withholding tax rate of 5%. Total tax burden: 13.64%.
  • It is also possible to opt for a three-year waiting period before distribution of the liquidation reserves. In that case, however, 6.5% withholding tax will have to be paid upon distribution. Net tax burden: 15%.
  • If the reserve is distributed before expiry of the three-year period, a withholding tax rate of 20% applies.
  • The increase in the withholding tax rate does not apply to these previously accumulated liquidation reserves.
• For reserves created on or after 31 December 2025 (assessment year 2026 onwards), the waiting period is always three years.
  • In case of distribution after expiry of the waiting period, the withholding tax rate is 9.8%, bringing the total tax burden to 18% (see table below).
  • The distribution of liquidation reserves within the three-year waiting period should be avoided at all costs, as this would result in the payment of both the tax due upon creation and the additional 30%.

Upon liquidation, no further tax is payable on the liquidation reserves, regardless of the date of creation and regardless of whether any waiting period has been observed. Please note that the intention cannot be to liquidate a company holding liquidation reserves in order to, shortly thereafter, set up another company with (almost) the same object. A specific anti-abuse provision has also been implemented in this context. If a company is liquidated and the shareholder receives the liquidation reserves tax-free into their private assets, those amounts may still be taxed as taxable dividends (at 30%) if it transpires that, within three years of the liquidation, that shareholder directly or indirectly holds the position of company manager in a company carrying out the same or similar activities as the company that distributed the liquidation reserves. However, the presumption of abuse can be rebutted on non-tax grounds.

For liquidation reserves created before 31 December 2025, business owners will need to carefully assess what would be best in their specific situation:

• Accelerated distribution at a withholding tax rate of 6.5% (if there are liquidation reserves that were created three or four years ago) or 
• Wait until the five-year period has expired and then distribute them at a withholding tax rate of 5% 

Many factors come into play here: how quickly and for what purpose the entrepreneur needs the money for their personal use; what alternative funding options are available from their private assets, etc.

Bear in mind that a FIFO (first in, first out) principle applies when distributing liquidation reserves. If you decide to distribute liquidation reserves that are less than five years old, the reserves that are four years old must be distributed first. However, you may be able to distribute those reserves within a few months at (only) 5% withholding tax (once they have been retained within the company for five years).

• 30% on distribution of profits for the financial year of incorporation (or capital increase) and for the following financial year
• 20% on distribution of profits for the second financial year after the year of incorporation (or capital increase)
• 15% on distribution of profits for the third financial year after the year of incorporation (or capital increase) and for all subsequent financial years
  

The Programme Act of 18 July 2025 abolished the 20% rate for shares issued after 31 December 2025.

Under the Programme Act of 30 May 2026, the concessionary rate will increase from 15% to 18% for dividend payments made on or after 1 July 2026.

In summary, dividends on qualifying shares issued before 1 January 2026 are therefore subject to the following withholding tax rates:

• 30% on distribution of profits for the financial year of incorporation (or capital increase) and for the following financial year
• 20% on distribution of profits for the second financial year following the financial year of the incorporation (or capital increase)
• 18% on distribution of profits for the third financial year following the financial year of the incorporation (or capital increase) and for all subsequent financial years

Dividend payments made before 1 July 2026 are still subject to the rate of 15%.

Dividends on qualifying shares issued on or after 1 January 2026 are subject to the following withholding tax rates:

• 30% on distribution of profits for the financial year of incorporation (or capital increase) and for the two subsequent financial years
• 18% on distribution of profits for the third financial year following the financial year of the incorporation (or capital increase) and for all subsequent financial years

It may therefore be tempting or even appropriate to pay out another dividend before 1 July 2026 under the VVPRbis scheme, while the 15% withholding tax rate still applies.

However, when it comes to the (accelerated) payment of a dividend – apart from the rate increase – there are a number of other questions to consider, for example:

• Is there a need to hold funds in private assets?
• Does the company qualify as a ‘family firm’ (which can be inherited at a flat rate of 3%)?
• Will the distribution affect the possibility to apply the reduced corporation tax rate? 

We recommend expressing the potential rate benefit of an accelerated payment not only in percentage terms but also in cash terms, and weighing that benefit against any other potential consequences of a decision. Of course, the company will also have to follow the appropriate company law procedure (i.e. general meeting, special general meeting, net asset test, liquidity test, etc.).

When a Belgian company receives dividends from another company, the dividend it receives can be exempted from corporation tax by applying the ‘dividends received deduction’ (DRD). For this tax deduction to be applied, three cumulative conditions must be met at the time the dividend is declared:

• The taxation condition means that the dividends received must relate to ‘good’ shares, i.e. shares held in companies that are subject to ‘normal’ (and therefore ‘final’) taxation on their profits in the country where they are established. If the company distributing the dividend pays little or no tax on its profits in the country in which it is established (for example in a tax haven), the dividend received cannot be exempted.
• The holding period condition means that dividends received must relate to shares that are or were held in full ownership for a continuous period of at least one year.
• The holding size condition means that the company receiving the dividend must hold a participating interest in the distributing company of at least 10% of the capital or with an acquisition value of at least 2 500 000 euros.

A stricter holding size condition applies for large companies from assessment year 2026 onwards. If the recipient of the dividends is a large company, a participating interest (holding) of less than 10% but with an acquisition value of at least 2 500 000 euros will moreover have to take the form of a ‘financial fixed asset’ to be eligible for the dividends received deduction.

For the term ‘financial fixed asset’, reference is made to the meaning assigned to it in accounting legislation. This implies that the shares held should be included under:

• ‘Participating interests in affiliated entities’
• ‘Participating interests in companies linked by participating interests’ or
• ‘Participating interests in other financial fixed assets’

Entering the shareholding under these items implies that the company wishes to have a lasting and specific connection with the company in which it invests and therefore does not see the participating interest purely as an investment.

Since the conditions applying for the dividends received deduction and the exemption from capital gains on shares in corporation tax are similar, there is an additional consequence for large companies. Capital gains on shares can only be exempted (for shareholdings of less than 10% and subject to some specific exceptions) if the acquisition value of the shares is at least 2.5 million euros and they are recorded as financial fixed assets.

This stricter holding size condition will apply with immediate effect from assessment year 2026! Changes made between 3 February 2025 and the closing date of the financial year will not be accepted unless it can be demonstrated that the change was motivated by economic (i.e. non-tax-related) considerations.

For small companies, the conditions applying for the dividends received deduction and capital gains exemption on shares will not change. A company is deemed to be small if at the balance sheet date it does not exceed more than one of the following criteria:

• Annual average number of employees: 50
• Annual turnover excluding VAT: 11 250 000 euros
• Balance sheet total: 6 000 000 euros
  

Exceeding more than one of these limits will only have consequences if it occurs during two consecutive financial years. When assessing the criteria, not only the data of the company itself but also of ‘affiliated companies’ must be taken into account.

A DRD Bevek is an investment company that has to meet a number of conditions. For example, a DRD Bevek must distribute at least 90% of the net income it receives.

A DRD Bevek offers a tax-efficient alternative to equity investments, as it allows the investor to obtain the exemption of dividends and capital gains on shares without having to meet the strict holding size condition and holding period condition (see above). However, the DRD Bevek must meet the taxation condition. In other words, the DRD Bevek will have to invest in shares of companies that meet the taxation condition. A DRD Bevek can receive both qualifying and non-qualifying income. Qualifying income is income (dividends, capital gains) from shares that meet the taxation condition. The ratio of qualifying income to total income (qualifying + non-qualifying) is calculated on an ongoing basis and produces the ‘DRD coefficient’.

Specifically, the company investor can:

• Receive capital gains exemption on sale of shares of a DRD Bevek in proportion to the DRD coefficient. Under the Miscellaneous Provisions Act, exempt ‘capital gains’ realised on shares of DRD Beveks are subject to 5% tax. In practice, however, the DRD Bevek will almost always buy back (and immediately cancel) its own shares. In that case, the company-investor does not realise a capital gain on shares, but receives a redemption bonus (= dividend), to which it can (permanently) apply the DRD deduction. The 5% assessment does not apply to this redemption bonus.
• Claim the DRD deduction on dividends distributed by the DRD Bevek in proportion to the DRD coefficient.

However, a DRD Bevek is required to deduct the appropriate withholding tax when it pays or declares a dividend. That is in contrast to a repurchase or liquidation bonus, which is not subject to withholding tax. In principle, the deducted withholding tax can be offset against corporation tax and reclaimed by the company-investor.

Under the Miscellaneous Provisions Act, from assessment year 2026, offsetting withholding tax against corporation tax is only possible for dividends received from a DRD Bevek insofar as the receiving company has paid the minimum remuneration for company managers in the income year in which it receives dividends from the DRD Bevek. Under the draft legislation, the minimum managerial remuneration would be raised to 50 000 euros (indexed). If no minimum remuneration is granted, failure to offset the withholding tax will generally result in the total tax burden on the dividend received exceeding the standard corporation tax rate of 25%. In such case, the company can, however, choose not to apply the DRD deduction to the dividend received, which means the coupon will be subject in full to corporation tax and the withholding tax can be offset. The total tax on the coupon would then amount to a maximum of 25% (similar to an ‘ordinary’ Bevek). The Finance Minister expressly endorsed this option in the Parliamentary Finance Committee.

More information on the annual tax on custody accounts.