Belgium Crypto Tax

The Belgian economy is the 6th biggest in the Eurozone, and the government is constantly focused on improving standards of taxation to attract even more international investments and promote innovation with the protection of society against fraudulent activities and undue taxation.

The Belgian General Administration of Taxes is the authority responsible for collecting and managing taxes and ensuring their due calculation in a fair and proper manner. The authority considers cryptoassets claims, not legal tender, and hasn’t so far introduced a comprehensive taxation framework for crypto businesses, which means that Belgian crypto businesses are obliged to follow general taxation rules. However, the general framework cannot provide clear rules with regard to such crypto-related activities as mining, staking, DeFi, or various types of tokens. Therefore, it is recommended that you seek the advice of our lawyers on an individual basis before deciding to start a new crypto business in Belgium.

In addition to national legislation, you should be equipped with knowledge on international standards of taxation that are imposed by international organizations. For example, the ​Organisation for Economic Cooperation and Development, of which Belgium is a member, has come forward with a new international framework for better tax transparency—the Crypto-Asset Reporting Framework. Its objective would be to lift crypto taxation standards and those of tax reporting through automated tax reporting and information-sharing among international tax authorities.

The next set of regulations is the EU Directive on Administrative Cooperation-DAC—aligned with CARF in view to reduce administrative burdens that crypto businesses deal with. DAC was agreed in principle for fair and effective taxation among member countries and covers reporting and exchange of information between the EU tax authorities of income or revenue generated through cryptoassets by EU residents.

Advantages of the Belgian Tax System

When it comes to international networks, Belgium is surely leading the way, as it has signed more than 150 international agreements on the elimination of double taxation. They allow businesses that have an international presence to avoid being taxed twice in two different countries. They explain in detail how the tax liabilities are calculated, in conformity with tax residence, what taxes are due according to Belgian law, and where Belgium must refrain from taxing an activity of a company or an individual. Though these agreements take a model from the OECD’s Model Taxation Convention in Income and Capital, these are designed to meet minimum standards for each of two contracting parties concerned.

It is also the leading country in support for businesses in research and development activities. For these reasons, it is considered a very important country in which innovative projects can be developed. The taxation environment is thus created not to have double taxation but to give legal certainty to investors carrying on R&D activities in Belgium.

Innovation income deduction means that from Corporate Income Tax, there is a potential tax deduction of 85% on the net income derived from activities of innovation, putting the effective rate for corporate taxation at 3.75%. It covers all such intellectual property rights as copyright-protected software. In addition, young innovative companies and companies paying wages to researchers involved in research projects executed in collaboration with universities and colleges of the EEA or with approved scientific institutions are entitled to receive subsidies on the wage paid to their researchers, and such subsidies are fully exempt from tax.

Other R&D incentives include the tax credit of qualified research and development expenses, which can be immediately deducted as business expenses or booked as intangible fixed assets and amortized at least over three years. Expenses arising from research activities, including R&D equipment and even patents, are immediately deducted. Another positive note on this tax credit is that it is refundable if it hasn’t been deducted for five subsequent years of taxation.

Corporate Income Tax

This is 25% for the standard rate of Corporate Income Tax in Belgium and is among the highest rates in Europe. Corporate income will be taxed depending on a company’s status for tax residency. The ones that are tax residents will have to pay the tax on worldwide income, while the non-residents will pay on their income as sourced in Belgium. According to Belgian domestic law, a company is a resident when its legal head office, central administration, or head office with effective management is located in Belgium.

Generally speaking, any Belgian company deriving income from trading and exchanging cryptocurrencies is liable to pay the standard rate. Not all crypto activities, however, are considered a taxable occasion. For example, if a company is involved in the mining of cryptocurrency, it does not create a tax occasion. Only capital gains derived from selling or using the cryptocurrency as a means of payment are taxed.

Value-Added Tax

The conventional VAT rate in Belgium is 21%. As expected, it is in line with the EU directives and pertains to the greater part of products and services sold in Belgium. Generally speaking, all crypto companies operating from Belgium, or selling their services to Belgian residents, need to be registered as VAT payers in Belgium. However, if this registration is not carried out within the required timeframe, companies subject to this tax shall be fined 250 Euros, together with a penalty of 10% related to the amount of VAT due.

Nevertheless, concerning crypto transactions, the Belgian VAT Administration aligned its regulations with the ruling of the Court of Justice of the European Union, which ruled out the applicability of the VAT exemption for transactions in currency, banknotes, and coins as legal tender to such non-traditional currencies as Bitcoin.

Regarding the threshold for VAT registration, the following rules apply:

• 35,000 EUR per annum threshold for foreign companies selling products to Belgian consumers through the internet
• No VAT registration threshold for non-resident companies providing taxable supplies in Belgium
• Small Businesses whose annual turnover in Belgium doesn’t exceed 25,000 EUR are VAT-exempt (however, they can optionally register as VAT payers)

Capital Gains Tax

Taxation of Capital Gains Tax in Belgium differs based on the gained profit from sales or disposal of assets made by either companies or individuals, residents, and non-residents. In relation to this, there are two types of Capital Gains Tax rates: one when gains are regarded as professional income, and another one when gains are considered speculative income.

The following are the progressive rates applied for the gains treated as professional income:

Where the capital gain represents speculative income, such is taxed at a flat rate of 33% and has to be declared as miscellaneous income in the tax return. This gain is also subject to communal taxes, ranging from 0 to 9%. Generally speaking, crypto gains and losses are considered speculative income; hence, the 33% taxable rate, which in a nutshell can be referred to as the main Belgian crypto tax.

The taxable amount represents the difference between the proceeds of the sale minus the cost of cryptoassets sold and any fees or commissions paid in respect of the sale. When a company is subject to Corporate Income Tax and it has realized any capital gains, it is also obliged to include the gains from cryptoasset transactions in its taxable profits, with losses being deductible.

Withholding Tax

Dividend, interest, royalties, and service fees paid by a Belgian Company are subject to Withholding Tax at 30%. The rate could be reduced or might be exempt under certain conditions provided by the Belgian and European legislation. For example, the exemption is available in case of distribution of profits made by a Belgian subsidiary to an EU parent company, in case the legal business structures of both these companies are comprised in the EU Parent-Subsidiary Directive, in case both are subject to Corporate Income Tax, and the parent company holds at least for one year at least 10% of shares in the capital of the distributing company.

Taxes on Gifts

Donations and gifts regarding cryptoassets in Belgium are also subject to progressive taxation between 3% and 27%, considering the place of registration of this gift. The base is determined by the difference in market value that the gift possesses at the time of donation minus the gift’s cost and any fees/commissions paid in conjunction with the donation. Donations between spouses, children, parents, grandparents, and grandchildren are all subject to the tax. Belgian Gift Tax is payable on the date the gift is given, when signature of the act before a Belgian notary is affixed and when the notarial deed is registered.

How do I pay taxes on crypto in Belgium in 2024?

Taxation of cryptocurrency income in Belgium in 2024 is made in accordance with the general principles laid down in previous years, considering all the latest changes and additions to the tax legislation. Below is an overview of the key points and some recommendations on payment of taxes on cryptocurrency income for Belgian residents.

Table with the main tax rates in Belgium

If you’re determined to have a successful crypto business in Belgium and are looking to optimise your taxes, our highly qualified and experienced legal consultants here at Regulated United Europe (RUE) will be pleased to assist you. We very well understand and closely monitor local and international taxation rules applicable to crypto businesses, and strive to ensure that our clients not only comply with local regulations but also operate in a tax-efficient way. Moreover, we’re more than happy to help you with the formation of a new Belgian crypto company, crypto licensing, and financial accounting. Book a personalised consultation now to receive comprehensive legal advice.

Also, lawyers from Regulated United Europe provide legal support for crypto projects and help with adaptation to MICA regulations.