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Tax Insights - 10-2019 - Securities tax annulled by the Constitutional Court

On October 17th, 2019, the Constitutional Court of Belgium annulled the securities tax legislation dd. February 7th, 2018 which entered into force on March 10th, 2018. This tax needed to be paid by persons who held one or more securities accounts in Belgium or abroad. The tax amounted to 0,15% and was calculated based on a person's share in the average value of the financial instruments in these accounts, provided that this share amounted to at least 500.000 EUR. The tax was mainly collected via intermediaries such as credit institutions, listed companies and investment firms. They calculated the amount due, withheld it and paid it to the State. In some situations, however, the taxpayer had to file a declaration himself.

SECURITIES TAX DISCRIMINATORY

The securities tax was an asset tax through which the Belgian legislator sought to achieve greater fiscal justice, since the tax was only payable on larger assets. Although this objective is legitimate, according to the Constitutional Court, the constitutional principle of equality and non-discrimination was not respected on several points.

Some financial instruments registered in a securities account were subject to the securities tax while others were not. Moreover, only shares registered in a securities account were subject to the tax; for registered shares not in a securities account, no securities tax was due. According to the Court, there is no justification for this difference in treatment, so this system was not in line with the principle of non-discrimination. It was also considered unconstitutional that a person who actually holds financial instruments with an average value of at least 
500.000 EUR could escape the tax if the securities account was held in the name of several holders.

CONSEQUENCES

The Constitutional Court has annulled the securities tax system for the future. This means that the consequences of this system will be maintained for the tax due for the reference periods ending before or on September 30th, 2019 at the latest. The Belgian State does not need to refund the tax already paid for these reference periods.

In case you would like to receive more information with respect to the implications of the above, or any other assistance, the RSM Belgium Tax team is at your disposal intertax@rsmblgium.be

RSM Intertax

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