Belgium Crypto Tax

The Belgian economy is the 6th largest in the Eurozone and the government is consistently working towards improving taxation standards in order to attract even more international investments, encourage innovation, and at the same time protect society from fraudulent activities and unjust taxation.

The Belgian General Administration of Taxes is responsible for the collection and management of taxes, as well as their correct and fair calculation. The authority considers cryptoassets claims, not legal tender, and hasn’t yet introduced a comprehensive taxation framework for crypto businesses, which means that Belgian crypto businesses are obligated to follow general taxation rules. However, the general framework can’t provide clear rules for such crypto-related activities as mining, staking, and DeFi or various types of tokens. Therefore, you should seek individual consultation with our legal consultants before deciding to start a new crypto business in Belgium.

In addition to national legislation, you should also become equipped with knowledge of international taxation standards, which are dictated by international organisations. For instance, the ​​Organisation for Economic Cooperation and Development (OECD), which Belgium is a member of, has introduced a new international tax transparency framework, the Crypto-Asset Reporting Framework (CARF). Its purpose is to improve crypto taxation and tax reporting standards through automated tax reporting and information-sharing among international tax authorities.

Another important set of rules is laid out in the EU’s Directive on Administrative Cooperation (DAC) which is aligned with CARF in order to minimise administrative burdens that crypto businesses have to deal with. DAC is designed to ensure fair and efficient taxation across member countries and covers the reporting and exchange of information between the EU’s tax authorities involving income or revenue generated through cryptoassets by EU residents.

Advantages of the Belgian Tax System

When it comes to international networks, Belgium is certainly the leader, as it has signed over 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 generally clarify how tax liabilities are determined on the basis of tax residence, what taxes must be paid in accordance with Belgian legislation, and where Belgium has to forgo its right to tax a business or an individual. These agreements are modelled after OECD’s Model Taxation Convention in Income and Capital which ensures minimum standards, but each of them is also tailored to meet the needs of two specific contracting parties.

Belgium is also a leader in delivering support to businesses engaged in research and development (R&D) activities, and is therefore considered a very important country to build innovative projects. The taxation environment is designed to reduce tax burdens and provide legal certainty to investors carrying out R&D activities in Belgium.

The Innovation Income Deduction allows a tax deduction of up to 85% of the net income sourced from innovation-related activities in Corporate Income Tax, which results in effective corporate taxation at a 3.75% rate. It also covers such intellectual property rights as copyright-protected software. Moreover, young innovative companies and companies paying wages to researchers engaged in research projects conducted in partnership with universities and colleges of the EEA or with recognised scientific institutions are entitled to receive wage subsidies on their researchers’ salaries which are fully exempt from taxes.

Other R&D incentives include the tax credit for eligible research and development costs, which can either be deducted immediately as business expenses or be recorded as an intangible fixed asset and depreciated over at least three years. Expenses incurred by research activities, including R&D equipment and patents, are immediately offset. Another advantage of this tax credit is that it is refundable if it hasn’t been deducted for five subsequent tax years.

Corporate Income Tax

In Belgium, the standard Corporate Income Tax rate is 25% which is among the highest rates in Europe. Corporate income is taxed based on the company’s tax residence status. Tax residents are subject to paying the tax on their worldwide income, and non-residents are obligated to pay the tax on their income sourced in Belgium. A company is considered a resident of Belgium for tax purposes if it has its place of effective management and central administration or registered office in Belgium.

Generally, any Belgian company that sources income from trading and exchanging cryptocurrencies is subject to paying the standard rate. However, not every crypto-related activity is taxable. For instance, if a company engages in crypto mining activities, it doesn’t trigger a taxable event. Only capital gains received from the sale or use of the cryptocurrencies as a means of payment are taxable.

Value-Added Tax

The standard Belgian VAT rate is 21%. Needless to say, that it’s aligned with the EU directives and applies to the majority of products and services sold in Belgium. Generally, all crypto companies operating from Belgium or selling their services to Belgian residents are required to register as VAT payers in Belgium. If companies liable for VAT don’t register in a timely manner, they can expect to receive a fine of 250 EUR and a penalty of 10% of the VAT due.

However, when it comes to crypto transactions, the Belgian VAT Administration has aligned its rules with the decision made by the Court of Justice of the European Union (CJEU) which ruled out that the VAT exemption for transactions involving currency, banknotes, and coins used as legal tender also applies to such non-traditional currencies as Bitcoin.

Regarding VAT registration thresholds, 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

In Belgium, the Capital Gains Tax is levied differently on profits received from the sale or disposal of assets made by companies or individuals who can be either residents or non-residents. There are two different types of Capital Gains Tax rates – one for gains treated as professional income and another for gains treated as speculative income.

Gains treated as professional income are subject to the following progressive tax rates:

• From 0 to 13,540 EUR – 25%
• From 13,541 to 23,900 EUR – 40%
• From 23,901 to 41,360 EUR – 45%
• From 41,361 EUR – 50%

If capital gains are treated as speculative income, they’re subject to tax at a flat 33% rate and must be disclosed in tax returns as miscellaneous income. This type of gain is also subject to communal taxes at 0-9% rates. Crypto gains and losses, including exchanging one cryptocurrency for another, are generally considered speculative income and are therefore taxable at the 33% rate which essentially is the main Belgian crypto tax.

The taxable amount is calculated by subtracting the costs of the sold cryptoassets and fees or commissions paid in connection with the sale from the proceeds of the sale. If a company that has realised capital gains is also subject to Corporate Income Tax, the gains from cryptoasset transactions also have to be included in taxable profits, with losses being deductible.

Withholding Tax

Belgian companies paying dividends, interest, royalties, and service fees are required to pay Withholding Tax at a 30% rate. In some cases, a reduced rate or exemption might be applicable in accordance with Belgian and European legislation. For instance, the exemption is available in the event of the distribution of profits generated by a Belgian subsidiary to an EU parent company when the legal business structures of both these companies are included in the EU Parent-Subsidiary Directive, and when both are subject to Corporate Income Tax, and when the parent company holds, for at least one year at least 10% of shares in the capital of the distributing company.

Gift Tax

In Belgium, cryptoasset donations and gifts are taxed at progressive tax rates ranging from 3% to 27% depending on the region where the gift is registered. The taxable amount is calculated by subtracting the cost of the gift and fees or commissions paid in connection with the donation from the market value of the gift at the time of the donation. The tax is applicable when donations are made between spouses, children, parents, grandparents, and grandchildren. Belgian Gift Tax is due once a gift is made by signing a Belgian notary deed and the notarial deed is registered.

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

In Belgium, the taxation of cryptocurrency income in 2024 continues to follow the general principles laid down in previous years, but taking into account all the latest changes and additions to the tax legislation. Below is an overview of the key points and recommendations on paying taxes on cryptocurrency income for Belgian residents.

1. Classification of income from cryptocurrencies

Cryptocurrency revenues in Belgium can be categorised as:

• Speculative income: income derived from the active trading of cryptocurrency may be considered speculative and is subject to personal income tax at a rate of 33% plus municipal taxes.
• Professional income: if cryptocurrency trading is the main source of income, such income may be classified as professional and taxed according to a progressive income tax scale of 25% to 50% plus municipal taxes.
• Other income: income from incidental transactions outside of professional activities is generally not taxable, provided it remains within the normal management of private property.

2. Declaration of income

All taxpayers are required to declare their income in a tax return. This also applies to income from cryptocurrencies. It is important to determine the exact nature of the income in order to correctly report it on the tax return.

3. Calculation of the taxable base

To calculate the taxable base, the amount of the initial purchase must be deducted from the income received from the sale of cryptocurrency. It is recommended to keep detailed records of all cryptocurrency transactions in order to facilitate calculations and the submission of relevant documents to the tax authorities, if necessary.

4. Payment of tax

After calculating the taxable base and determining the amount of tax payable, taxpayers must make the relevant payments by the due dates. It is important to keep track of tax payment deadlines to avoid penalties and interest for late payment.

5. Storage of documentation

Keeping all documents confirming transactions with cryptocurrencies (purchase and sale agreements, statements from wallets and exchanges, transfer confirmations, etc.) is mandatory. These documents may be required to confirm information in the tax return in case of audits.

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.