What is the Belgian Financial Transaction Tax?
The Belgian Financial Transaction Tax (FTT) is a tax levied upon the acquisition and disposal of certain financial instruments on the secondary market if carried out in Belgium through a professional intermediary or if the order is directly or indirectly made to a professional intermediary established outside of Belgium, by private individuals' and entities resident in Belgium.
Who owes the Belgian Financial Transaction Tax?
In general, professional intermediaries are liable for the payment of Belgian FTT on transactions they carry out on behalf of third parties. In case transactions are executed by a foreign professional intermediary, the taxpayer status is shifted to the Belgian resident individual or corporate entity. Nevertheless, we offer the possibility to collect Belgian FTT from Belgian resident Clients and pay and report the Belgian FTT to the Belgian tax authorities on their behalf. Belgian resident Clients can, however, choose to calculate and pay the tax and file a Belgian FTT tax return themselves.
Which financial instruments are subject to Belgian Financial Transaction Tax?
Belgian FTT applies to transactions in relation to certain financial instruments. The financial instruments in scope include, but are not limited to, shares, ETFs, ETCs, bonds, contractual fund participations, shares in investment companies, and certificates.
Which transactions are subject to Belgian Financial Transaction tax?
Belgian FTT applies to both buy and sale transactions in certain financial instruments when it takes place in exchange for a consideration (payment) and is executed on the secondary market by a Belgian resident.
For example, the purchase or sale of a share on a stock exchange is subject to Belgian FTT. Additionally, the redemption of a share in an accumulating investment company is also considered a taxable event. The subscription of shares or bonds at the time of issuance is exempt from Belgian FTT.
What is the taxable base and tax rate?
The taxable base is the total transaction value, and the tax is calculated as a percentage of it.
There are three Belgian FTT rates (0.12, 0.35 or 1.32%) and three corresponding maximum amounts (EUR 1,300, 1,600 or 4,000), which depend on the type of financial securities being traded:
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- 0.12% for certain Bonds, ETFs registered in the European Economic Area (EEA), and shares of Belgian REITS (Maximum €1300);
- 0.35% for Shares, Real estate certificates, ETFs not registered in the EEA, Commodities and ETCs and all other instruments that are not subject to any specific TOB (warrants, turbos and certain debt instruments) (Maximum €1600); and
- 1.32% when buying or selling under capitalization shares, i.e. shares in Accumulating ETFs registered or authorized in Belgium (Maximum 4000 euros).