Annual Tax on Securities Accounts

What is it?

The Belgian Law of 17 February 2021 (Belgian official journal 25/02/2021) introduced an annual tax on securities accounts (hereinafter ATSA) with an average value of more than 1 million euros over a given reference period. The tax is only due if the average value of the securities account during the reference period exceeds the threshold of 1 million euros and is due annually.

What is meant by “securities account”?

Securities accounts are accounts to which financial instruments may be credited or from which financial instruments may be debited. At Keytrade Bank, this includes regular securities accounts as well as securities accounts linked to the Keyplan investment plan and the Keyprivate portfolio management service.

Does the threshold of 1 million euros apply per securities account or per account holder?

The threshold of 1 million euros applies per securities account, irrespective of the number of co-holders. For example, the tax applies to a securities account with a value of 2 million euros held by 2 co-holders. By contrast, an individual who has two securities accounts each with a value of 999,999.00 euros each is not liable for the tax (however, please be aware of the anti-abuse provisions; please take a look at the “What are the anti-abuse measures?“ question).

Who is liable for the tax?

All holders of a securities account, irrespective of whether they are held by natural persons or legal entities (companies, non-profit organisations and foundations).

To which securities accounts does the tax apply?

The tax applies to the following securities accounts: securities accounts held with Belgian banks by Belgian residents or non-residents (subject to a double taxation treaty which stipulates that the powers of taxation would return to the state of residence). It also applies to securities accounts held abroad by Belgian residents.

What happens if the account is held by a number of joint holders?

The ATSA is charged on the securities accounts themselves and the amount is determined based on the average value of the taxable financial instruments held in the account. An individual’s assets are not considered. The taxable event is the very existence of the securities account. Therefore, the number of holders of the securities account and their underlying ownership statuses (full ownership, joint ownership, usufruct or bare ownership) have no influence on whether the ATSA applies.

What is the taxable amount for the ATSA?

The taxable amount is the average value of the taxable financial instruments over the reference period.

Therefore, it is the total value of the taxable financial instruments at the reference points within the reference period, divided by the number of reference points.

What is the ATSA rate?

The ATSA rate is set at 0.15%. However, the tax amount may not exceed 10% of the difference between the taxable amount and the threshold of 1,000,000 euros.

Without this mechanism, a securities account of 1,000,001 euros would incur tax of 1,500.00 euros (i.e. 0.15% of EUR 1,000,001 after rounding), which would bring its value down to EUR 998,501, whereas no tax is due on a securities account of 1,000,000 euros. In this example, under the tax limitation measure, the tax can be limited to 0.1 euros, i.e. 10% of the difference (1 euro) between the average value of the securities account (1,000,001 euros, in this example) and the threshold of 1,000,000 euros.

This limit no longer applies when the taxable amount reaches 1,015,228.42 euros. It was introduced in order to prevent the value of a securities account from falling below the threshold after the tax is applied.

Is the ATSA due on all securities accounts that fall within the scope of the ATSA?

No, the tax is not due if the average value of the taxable financial instruments of a securities account over the reference period is less than or equal to 1,000,000 euros.

I am not a Belgian tax resident. Am I liable for the tax?

Belgian securities accounts held by individuals who are tax residents of a country which has signed a double tax treaty with Belgium may be exempt from the tax, provided that the double tax treaty between Belgium and their country of tax residence covers income and wealth. This is the case for the Netherlands, Switzerland and Germany, for example. However, the ATSA may apply to Belgian securities accounts held by residents of the United Kingdom, France and Luxembourg. A full list of countries is set out in the appendix to the ATSA FAQ put together by the Federal Public Service Finance [not available in English]. Furthermore, the exemption only applies if ALL account holders are tax residents of exempted countries. Therefore, the securities account is subject to the tax as soon as only one of the account holders is a Belgian tax resident, or a resident of a country which has not signed a double taxation treaty with Belgium (or has signed a treaty that only covers income).

What is the taxable amount for the ATSA and how is it calculated?

The taxable amount is the average value of the taxable financial instruments over the reference period. It is determined by (i) adding up the values of the taxable financial instruments at each reference point when the account existed; followed by (ii) dividing the total amount by the number of reference points. Example: a value of 1.5 million euros at the first reference point, 2 million euros at the second reference point, 1 million euros at the third reference point and 1.5 million euros at the fourth reference point gives an average value of 1.5 million euros, i.e. [1.5 million euros + 2 million euros + 1 million euros + 1.5 million euros]/4. The ATSA will therefore be 2,250 euros (1.5 million euros x 0.15%).

What is the reference period?

A normal reference period is a period of 12 consecutive months that begins on 1 October (year x) and ends on 30 September of the following year (year x+1).

The reference period is shortened if a securities account is opened after 1 October (it starts on the opening date), if it is closed before 30 September (it ends on the closing date) or if the sole holder of a securities account subject to the ATSA becomes a resident of a country with which Belgium has signed a double taxation treaty resulting in the powers of taxation over assets in the securities account being assigned to the other country (it ends on the date that the tax residence is changed).

What is meant by “reference point”?

A reference point is the date on which the value of the taxable financial instruments held in the securities account must be established for the purposes of calculating the taxable amount.

How many reference points are there in the reference period?

As a general rule, the reference period has four reference points, which are on the last day of each quarter, i.e. 31 December year x, 31 March year x+1, 30 June year x+1 and 30 September year x+1.

If a securities account is opened or closed during the normal reference period (resulting in a shortened reference period), only the reference points when the securities account existed are considered when calculating the taxable amount. An additional reference point is not created as a result of opening or closing a securities account.

For example:

• If a securities account is opened on 2 March year x, three reference points may still be considered when calculating the average value of the taxable financial instruments in this account for this shortened reference period, i.e. 31 March year x, 30 June year x and 30 September year x;
• If a securities account is opened on 20 November year x, the reference period is also shortened. However, it will include the four aforementioned reference points, e. 31 December year x, 31 March year x+1, 30 June year x+1 and 30 September year x+1;
• If a securities account is closed on 2 March, the shortened reference period will only include 1 reference point, i.e. 31 December of the previous year;
• If a securities account is closed between 1 October and 31 December of the same year, the reference period which started on 1 October does not have a reference point.

What happens if I close my securities account?

If you close a securities account, the reference period ends earlier. The tax is calculated over a shortened reference period, which runs from 1 October to the day when the account is closed. Only the reference points when the account existed are considered when calculating the tax.

For example:

• If an account is closed on 1 January 2024, the tax will be calculated over a shortened reference period, which runs from 1 October 2023 to 1 January 2024. It will only include one reference point: 31 December 2023;
• If a securities account is closed on 18 August 2024, three reference points will be considered when calculating the average value of the securities account, i.e. 31 December 2023, 31 March 2024 and 30 June 2024;
• If a securities account is closed on 2 November 2024, the securities account will not de facto be subject to the ATSA, as there is no reference point. This is because the first reference point for the reference period that started on 1 October 2024 is 31 December 2024 and the securities account no longer exists on that date.

What happens if my country of tax residence changes as a result of a relocation?

Should you move from Belgium to a country which has signed a double taxation treaty with Belgium covering both income and wealth (see the question "I am not a Belgian tax resident. Am I liable for the tax?" above), the tax will be calculated over a shortened reference period which will run from 1 October to the date when you relocate abroad. Please note that this only applies if all of the account holders relocate to a country for which the exemption applies. As long as one of the holders of the securities account is a Belgian tax resident, or a resident of a country that is not exempted under a treaty, the securities account is still taxable. If one of the holders relocates to an exempted country, this does not result in a shortened reference period. This will only occur when the final holder who is a tax resident of a taxable country relocates to an exempted country.

What is meant by “taxable financial instruments”?

All financial instruments held in a securities account are subject to the ATSA (such as shares, bonds, certificates, warrants, trackers, swaps, options, turbos and speeders). Cash (EUR or foreign currencies) held in the securities account is also considered a taxable financial instrument. Registered securities (recorded in a shareholder register with the issuing company) are not considered taxable financial instruments.

What are the ATSA anti-abuse measures?

An ATSA-specific anti-abuse mechanism was introduced, which established an irrefutable presumption of tax abuse in certain cases. In these cases, the transaction was presumed to be abusive, unless the taxpayer could provide proof to the contrary. This specific anti-abuse mechanism was annulled by the Constitutional Court, but a more general anti-abuse measure still applies to the ATSA.

The more general anti-abuse measure establishes a refutable legal presumption of tax abuse in the following situations (open-ended list):

• splitting securities accounts whereby securities are moved to one or more accounts with the same financial institution or to securities accounts with one or more other financial institutions, with the aim of preventing the total value of the securities in one account from exceeding 1,000,000 euros;
• opening securities accounts whereby the securities are distributed between accounts with the same financial institution or with another financial institution, with the aim of preventing the total value of the securities in one account from exceeding 1,000,000 euros;
• converting shares, bonds or other taxable financial instruments into registered securities so that they are no longer held in a securities account, with the aim of evading tax;
• placing a securities account subject to the tax in a foreign legal person which transfers the securities into a foreign securities account, with the aim of avoiding tax;
• holding a securities account subject to the tax in a fund with registered units, with the aim of avoiding tax;
• transferring an existing securities account or branch 23 insurance policy to a branch 23 insurance policy taken out with an insurance company established outside Belgium, with the aim of evading tax;
• transferring a securities account when the securities are transferred abroad to the same financial institution or into accounts with another financial institution, with the aim of evading tax;
• holding a securities account in which all of the securities have been sold or transferred in order to create zero values at the reference points in order to reduce the average value of the taxable financial instruments during the reference period, with the aim of reducing or evading tax.

The burden of proof of the existence of tax abuse lies with the tax authorities.

Financial institutions are only subject to the anti-abuse provision in relation to their own actions, i.e. in relation to transactions carried out at the instigation of or on the advice of a financial institution, with the aim of helping the holder to evade tax.

On the other hand, holders are subject to the anti-abuse provision if they alone and themselves take the initiative and give instructions to the financial institution, with the aim of evading tax. It is not up to financial institutions to assess the nature or extent of an affirmed intention from the holder to evade or avoid tax or to ignore clear and contractually valid instructions from the holder.

It will be up to the taxpayer to prove that the transactions that they have carried out are not solely in order to avoid tax.

Where can I find my report on the tax on securities accounts?

The “Securities Account Tax - 202X report” document can be found in the “Documents” tab of the relevant securities account. Log in to the transaction site, open your “Investing” dashboard and then click on any securities account > Details > “Documents” tab. If there is no report there, the value of your securities account has not exceeded the threshold of 1,000,000 euros at the reference points during the reference period.

How do I report and pay the ATSA due (should it apply)?

If the report shows that the average value of the taxable financial instruments is less than 1,000,000 euros, no tax is due. If the report shows that an amount of tax is due, this will be automatically debited from your securities account with the number mentioned in the report in November (you will be notified of the exact date each year). In this case, please make sure that you have sufficient cash (in EUR) in this securities account to pay the tax amount. If you do not, please transfer the exact amount of tax due into this account as soon as possible (see the “How do I pay some cash into my securities account in order to pay the tax?” question). Keytrade Bank is responsible for withholding, reporting and paying the tax.

Please note: Holders of securities accounts must themselves report and pay the tax if they hold securities accounts with financial institutions not incorporated or established in Belgium which do not have an authorised responsible representative.

Can I choose the account from which the ATSA will be charged?

You cannot choose the account from which the tax amount will be charged. The amount will be charged from the securities account with the number mentioned in the report. This is the securities account to which the tax applies. The account will be charged in November (you will be notified of the exact date each year). Therefore, you must ensure that sufficient cash is available in this securities account on that date.

How do I pay some cash into my securities account in order to pay the tax?

Please note that a transfer to the securities account liable for the tax can only be made from a Keytrade Bank account (savings account, securities account or current account) opened in the name of exactly the same holder(s) as the securities account liable for the tax. Want to pay the tax amount from another account (for example, an account opened with another bank, or a current account with Keytrade Bank that you share with another person)? In that case, you must first transfer the amount to the current account opened with Keytrade Bank in the name of exactly the same holder(s) as the securities account liable for the tax. You can then transfer it from this current account to the securities account liable for the tax.