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Belgian ISF – Subscription tax on securities accounts

While France has just abolished its solidarity wealth-tax and replaced it with a tax on real estate assets, thus restricting its scope of application, Belgium has recently introduced a tax on securities accounts. It can be perceived by some as a Belgian equivalent to the “ISF” (French wealth tax). Many tax exiles who left France for Belgium are therefore considering relocating back to France, depending on their bottom-line impact. They are now facing a dilemma: on the one hand living in a country that is taxing their heritage and on the other hand living in a country taxing where financial income will become taxable.

Under the pressure of the IMF and Europe, Belgium has decided to tax the wealthiest taxpayers with securities accounts worth more than € 500,000 at a rate of 0.15%. The measure applies to natural persons and is expecting to bring more than € 250 million to the State’s annual budget. Its scope extends to bonds, cash certificates, shares, SICAVs or investment fund units, tracker funds, share certificates as well as warrants. The tax excludes pension savings funds, options, shares of approved cooperative companies and registered shares that are not considered as securities accounts.

The deduction of the tax falls under the responsibility of the financial intermediaries as they must directly withhold the tax at source on the account(s) of their customers on or before the 30th of October each year. The financial institution then has the obligation to pay the due taxes over to authorities on or before the following 20th of December. It should be noted that for accounts exceeding €500,000 financial intermediaries must directly collect the tax due. For accounts lower than €500,000 individual customers have the option to fulfill the tax obligation themselves. If however the client has more than one account and the sum of all accounts is in excess of €500,000 the tax liability will still crystalize.