Belgium: "Tax on savings" extended to investment funds without European passport

In the context of the budget control 2013 and the budget for 2014, the Belgian Government announced, on 1 July 2013, a new tax measure: the “Belgian Tax on savings”.

This new tax has been approved by the Belgian Parliament and published in the Belgian official Gazette on 1 August 2013.

The “Tax on savings” is effective as of 1 July 2013 and extends the scope of article 19bis of the Belgian Tax Code to cover debt funds (that is, investment funds with more than 25% invested in debt claims), with and without European passport.

Previously in Belgium, only investment funds with a European passport (UCITs) were subject to withholding tax of 25%. Now, the tax rate of 25% applied on capital gains realised from repurchase/sale or liquidation of shares or units in debt funds will also be applied to investment funds without European passport.

The new tax measure has a retroactive effect: the taxable amount will be calculated on the transactions on or after 1 July 2013 and will include ”interest” and “accrued interest” received as from 1 July 2008. In the absence of a taxable income per shares, a standard return rate of 3% must be applied between 1 July 2008 and 1 July 2013 on investment values of debt securities.

Normally, this measure only impacts individuals investing in investment funds without European passport.

As we play no role in the collection and payment of capital gains tax, the new law has no impact on our current procedure. Responsibility falls solely on the final beneficial owner for compliance with its legal obligation in relation to such tax.