Belgian Tax on Stock Exchange Transactions
Upon the issuance of ADSs (primary market transactions) no tax on stock exchange transactions is due.
The purchase and sale or any other acquisition or transfer for consideration of existing ADSs (secondary market) in Belgium through a
professional intermediary is subject to the tax on stock exchange transactions. The tax is due from the transferor and the transferee separately. The applicable rate amounts to 0.35% with a cap of 1,600 per transaction and per party.
Belgian non-residents who purchase or otherwise acquire or transfer, for consideration, ADSs in Belgium
for their own account through a professional intermediary established in Belgium may be exempt from the tax on stock exchange transactions if they deliver a sworn affidavit to such intermediary confirming their nonresident status, unless they would
be considered to have their habitual abode (for individuals) or their seat or establishment (for legal entities) in Belgium.
In addition
to the above, no tax on stock exchange transactions is payable by: (i) professional intermediaries described in Article 2, 9 and 10 of the Law of August 2, 2002 acting for their own account, (ii) insurance companies described in
Article 2, §1 of the Law of July 9, 1975 acting for their own account, (iii) professional retirement institutions referred to in Article 2, §1 of the Law of October 27, 2006 relating to the control of professional retirement
institutions acting for their own account, (iv) collective investment institutions acting for their own account, (v) the aforementioned non-residents acting for their own account (upon delivery of a
certificate of non-residency in Belgium), or (vi) regulated real estate companies acting for their own account.
No tax on stock exchange transactions should thus be due by Holders on the subscription, purchase or sale of ADSs, if the Holders are acting
for their own account. In order to benefit from this exemption, the Holders must file with the professional intermediary in Belgium a sworn affidavit evidencing that they are nonresidents for Belgian tax purposes.
Proposed Financial Transactions Tax
The European Commission has published a proposal for a Directive for a common financial transactions tax, or FTT, in Belgium, Germany, Estonia,
Greece, Spain, France, Italy, Austria, Portugal, Slovenia and Slovakia, or collectively, the Participating Member States. However, Estonia has since stated that it will not participate, and it is unclear whether Belgium will participate.
The proposed FTT has a very broad scope and could, if introduced in its current form, apply to certain dealings in ADSs in certain
circumstances. Under current proposals, the FTT could apply in certain circumstances to persons both within and outside of the Participating Member States. Generally, it would apply to certain dealings in ADSs where at least one party is a financial
institution, and at least one party is established in a Participating Member State.
A financial institution may be, or be deemed to be,
established in a Participating Member State in a broad range of circumstances, including by transacting with a person established in a Participating Member State.
The proposal currently stipulates that once the FTT enters into force, the participating Member States shall not maintain or introduce taxes on
financial transactions other than the FTT (or VAT as provided in the Council Directive 2006/112/EC on the common system of value added tax). For Belgium, the tax on stock exchange transactions should thus be abolished once the FTT enters into force.
The proposal is still subject to negotiation between the participating Member States and therefore may be changed at any time.
Prospective
investors are advised to seek their own professional advice in relation to the FTT.
Tax on Securities Accounts
Belgian non-resident individuals are taxed at a rate of 0.15% on their share in the average value of
qualifying financial instruments (such as shares, bonds, certain other type of debt instruments, units of
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