Capital gains tax Belgium will reshape the scene of investment returns from January 1, 2026. The Belgian government’s draft legislation brings a 10% tax on financial assets’ capital gains for individuals. This new tax covers shares, cryptocurrencies, and insurance contracts.
Shares and other financial instruments that are transferred outside of professional dealings will be subject to the tax. Each taxpayer receives an annual exemption of €10,000, and only net gains exceeding this amount are subject to taxation. You can carry forward €1,000 of unused exemptions, allowing you to reach a maximum of €15,000 after five years. Financial institutions will manage tax withholding at the source, making compliance easier for most investors. Capital gains before December 31, 2025 stay exempt from Belgium’s capital gains tax rate.
Your investment planning and future returns need a clear understanding of these changes if you own Branch 23 investments or other financial assets in Belgium.
Overview of Belgium’s Capital Gains Tax Reform (2026)
Belgium plans to completely transform its taxation system for investment gains. Belgium has managed to keep capital gains on personal investments tax-free since 1962. This system will change completely by 2026.
Scope of Application: Individuals and Legal Entities
The new capital gains tax in Belgium targets individuals who earn income from financial assets unrelated to their employment. Belgian residents and non-residents who earn capital gains from sources within Belgium must pay this tax. Non-residents will only pay tax on gains they make from Belgian sources.
The reform establishes distinctions among different categories of taxpayers:
- Individual taxpayers will see the biggest effect of the new tax rules on their investment portfolios
- Professional investors will keep working under existing tax frameworks for business income
- Corporate entities will continue with their current corporate income tax treatment
You might still have to pay taxes even if you do not directly own any securities. The tax applies to gains made through collective investment vehicles, fund structures, and investment vehicles.
Definition of Financial Assets under the New Law
The capital gains tax in Belgium encompasses a variety of financial instruments. The new law will tax these financial assets:
- Shares, stock options, and equity-based securities
- Bonds and fixed-income instruments
- Cryptocurrencies and digital assets
- Derivatives and structured products
- Units in collective investment schemes
- Branch 23 insurance contracts and similar investment-linked insurance products
The capital gains tax in Belgium also applies to indirect holdings through investment vehicles. This applies whether you own these assets directly or through intermediary structures.
Some assets will not be subject to this new tax. Non-financial assets, such as real estate, will be subject to different tax rules. Assets in pension schemes and certain long-term savings vehicles will keep their special tax treatment to help with retirement planning.
Capital Gains Tax Rate in Belgium: 10% Flat Rate Explained
Belgium has implemented a simple 10% flat rate for capital gains tax. This flat rate makes the system easy to manage and keeps Belgium competitive internationally. Regular income tax can go up to 50% for high earners, but this flat rate will give investors a clear picture of what they’ll pay.
You will pay tax on your net capital gain, which is the difference between the purchase price and the selling price. Special rules apply to assets purchased before December 31, 2025. These assets will use their market value on that date as the purchase price, which will protect existing unrealised gains.
Each taxpayer receives a yearly tax-free allowance of €10,000. We’ll only pay tax on gains above this amount. You can carry forward unused portions (up to €1,000) for five years, up to €15,000. This helps investors who don’t make regular gains and gives them some flexibility.
The capital gains tax rules for Belgian stocks allow you to offset losses against gains within the same tax year. However, you can’t carry these losses forward to future years.
Branch 23 Life Insurance Contracts Under the New Tax
Branch 23 life insurance policies in Belgium have been considered tax-friendly investments for many years. The upcoming capital gains tax will change their appeal by a lot.
Inclusion of Branch 23 in Taxable Financial Assets
The new law classifies Branch 23 life insurance contracts as taxable financial assets. These investment-linked insurance products were previously exempt from income tax. Now, these contracts fall under the capital gains tax framework in Belgium. The draft bill takes a detailed look at taxable assets and specifically targets Branch 23 contracts, among other financial instruments.
The liquidation of a Branch 23 life insurance contract is considered an asset disposal under the new rules. This means that you will have to pay tax on any gains when you surrender the contract or when it reaches maturity. It’s a big change to their tax status.
Contract holders of Branch 23 can choose between two methods for calculating the value. They can choose to use either the total premiums paid or the reserve value, depending on which amount is higher. This arrangement gives them some choice in working out their tax base.
Effect on Tax Deferral and Final Tax-Free Surrender
The tax benefits of Branch 23 insurance contracts will decrease following the reform. The current system allows these contracts to completely avoid income tax. Benefits, partial withdrawals, and total surrenders don’t face the 25% withholding tax, even in the contract’s first eight years.
Another benefit that is being eliminated is the ability to switch between funds in a Branch 23 policy without incurring tax. Investors can currently adjust their strategy as markets change without worrying about tax.
Eight-year-old Branch 23 insurance policies or contracts that do not have guaranteed returns are exempt from paying professional withholding tax and stock exchange tax. This tax-smart setup makes Branch 23 contracts perfect for succession planning.
Interaction with 2% Insurance Premium Tax
The 2% premium tax currently represents the main tax burden on Branch 23 contracts. This tax applies to the entire premium amount and all associated charges. Taxes started on January 1, 2013. It affects individual life insurance contracts where Belgium holds the risk, but retirement savings contracts don’t pay it.
Paying this 2% premium tax allows investors to avoid withholding taxes indefinitely, regardless of the returns they earn. This one-time payment for lifetime tax freedom makes Branch 23 contracts attractive.
Some Branch 23 providers assist in spreading out the premium tax payment. For example, some products allow you to spread the initial premium’s tax payment over four years starting from the contract’s first anniversary. New premiums issued after the initial four-year period cannot take advantage of this payment spread.
Individuals who paid premiums before becoming Belgian tax residents were exempt from the 2% premium tax. They only paid premium tax on top-ups made after becoming Belgian residents.
The combination of this 2% premium tax and the new 10% capital gains tax results in double taxation. This makes Branch 23 contracts less appealing than other investment options.
Comparing Branch 23 vs Investment Accounts Post-2026
Investors should carefully analyse their options when choosing between Branch 23’s insurance products and direct investment accounts. The upcoming capital gains tax in Belgium adds another layer to consider when weighing costs against tax implications.
Ongoing Costs and Fee Structures
Branch 23 contracts charge fees that reduce returns by a lot over time. These fees include:
- Entry charges that can reach up to 5% of your investment
- Annual management fees that cost more than standard investment funds
- 2% insurance premium tax on every contribution
When you invest €100 in a Branch 23 fund, €2 is immediately deducted for tax and up to €5 is charged as entry fees. This means that only €93 is actually working for you. Branch 23 products still attract many investors because of their tax benefits.
Direct investment accounts that use ETFs are less expensive to maintain. They do not incur the 2% premium tax. Instead, they only pay the Tax on Stock Exchange Transactions (TOB) between 0.12% and 1.32% based on the ETF type.
Capital Gains Tax: Belgium Shares vs Branch 23
Starting in January 2026, both types of investments will be subject to a similar 10% capital gains tax. There are still some key differences:
Both options qualify for the annual €10,000 exemption, which can be carried forward to a maximum of €15,000. All the same, you must declare these gains on your tax return. Any refunds might take up to two years.
You can offset capital losses against gains from both types of investments in the same tax year. Even with similar tax treatment, Branch 23 products might give you lower returns because of their higher ongoing costs.
Dividend and Interest Taxation Differences
Branch 23 products have a clear advantage: they do not incur withholding tax on income. Regular investment accounts pay 30% withholding tax on dividends.
This difference might seem significant, but smart investors can avoid paying dividend taxes. They do this by choosing accumulating ETFs rather than distributing ones. These funds automatically reinvest dividends rather than paying them out, which helps avoid immediate taxation.
The largest longitudinal study comparing these options shows striking results. A €100,000 investment over 30 years ended up at €380,000 with Branch 23 contracts. The same money spent on index investing grew to €638,000. This giant gap shows how Branch 23’s higher fees overshadow its tax benefits, especially once the new capital gains tax takes effect.
Valuation and Exemption Rules for Branch 23 Assets
Understanding the valuation of Branch 23 assets is crucial for minimising your tax burden under Belgium’s new capital gains tax regime. The rules give clear guidelines for determining taxable gains, applying exemptions, and handling potential losses.
Acquisition Value as of 31 December 2025
Life insurance contracts from Branch 23, purchased before January 1, 2026, have an acquisition value that is equal to the higher of two amounts on December 31, 2025: the inventory reserve or the total of paid premiums. This valuation method exempts all historical capital gains accrued before 2026, meaning that only future growth will be subject to the capital gains tax in Belgium.
The calculation of the taxable capital gain is straightforward: it is the difference between the price received upon surrender and the acquisition value, without deducting any costs or taxes. Your Branch 23 contract’s value at the end of 2025 needs proper documentation for future tax calculations.
€10,000 Annual Exemption and Carry-Forward Rules
Belgium’s capital gains tax rate includes a €10,000 yearly exemption per taxpayer. You won’t pay any tax on Branch 23 surrenders unless your yearly profit exceeds €10,000. The exemption threshold adjusts each year with inflation.
The exemption system is beneficial for investors who do not have a regular income. When you don’t use your full exemption in a year, you can carry forward up to €1,000 of the unused part for five years. This carry-forward option lets the exemption grow to a maximum of €15,000 (€30,000 for married couples on community property).
Capital Loss Offsetting Within the Same Tax Year
You can offset capital losses from Branch 23 contracts against capital gains, but there are important limitations to consider. We used losses only against gains from the same tax year and in the same category of financial assets.
When you surrender a Branch 23 contract at a loss, that loss can be used to offset taxable gains from other financial assets within the same calendar year. The unused capital losses, unlike the exemption amount, can’t carry forward to future tax years.
Loss calculations use the valuation from December 31, 2025 as the reference point. Both gains and losses on Branch 23 contracts follow the same valuation principles under Belgium’s new capital gains tax framework.
Pre-2026 Planning Strategies for Branch 23 Investors
Time is running out before Belgium’s capital gains tax takes effect. We need to plan our Branch 23 investments strategically. Quick action now will substantially affect your tax situation in the future.
Tax-Free Surrender Before 1 January 2026
Our capital gains will remain completely tax-exempt until December 31, 2025. The government will classify all partial surrenders from Branch 23 contracts as taxable disposals after this date. Many investors might benefit financially by surrendering their Branch 23 contracts before 2026 due to these tax changes.
You should document the value of your Branch 23 investments as of December 31, 2025, if you plan to retain them. This value will become your acquisition basis for future tax calculations. The tax authorities might treat your entire future surrender proceeds as a taxable gain without proper documentation.
Switching to Investment Accounts: Cost-Benefit Analysis
Traditional investment accounts may provide better long-term returns once Belgium’s capital gains tax standardises taxation across different investment vehicles. Financial models show that €100,000 invested over 30 years could grow to about €380,000 in Branch 23 products compared to €638,000 through index investing.
Do you need help structuring your investments in a tax-efficient manner? Are you an expatriate with more than €50,000 available for investment? Book your free initial consultation today.
Avoiding Exit Tax on Relocation Abroad
Moving your tax residence abroad could trigger potential exit tax liability. The new laws classify emigration as a “realisation” of latent capital gains. You can defer payment if you move within the EU/EEA or to countries with suitable tax treaties.
Your reporting obligations continue for two years after emigration. The exit tax is due if you sell assets during this period. The tax ends up uncollected if you move to a qualifying country and keep your assets for at least two years after relocation.
Conclusion
Belgium’s new capital gains tax will reshape the scene for Branch 23 contract holders and other investors starting January 2026. The change from tax-exempt status to a 10% flat tax rate represents a significant shift after decades of exemption. You should act before the end-of-2025 deadline to protect your financial interests.
Branch 23 insurance contracts will soon lose their tax advantages when these products and direct investment accounts are subjected to the same 10% taxation. On top of that, Branch 23’s products’ higher fees—entry charges, management fees, and a 2% premium tax—will likely exceed their benefits for many investors after 2026.
The €10,000 yearly exemption provides some flexibility, particularly because any unused portions can be carried forward. Mathematical models show traditional investment accounts could yield better long-term returns once tax treatment becomes equal across investment vehicles.
Your top priority should be to document your Branch 23 contract’s value by December 31, 2025. This figure will represent your acquisition value for future tax calculations. Missing documentation could make your entire proceeds a taxable gain when you surrender the contract.
Do you want help structuring your investments in a tax-efficient manner? Are you an expatriate with more than €50,000 available for investment? Set up your free initial consultation today.
Your specific financial situation determines whether to surrender Branch 23 contracts before 2026. Capital gains realised before the deadline are fully tax-exempt. You must weigh this benefit against the surrender charges and the lost insurance benefits. Without a doubt, this tax reform indicates that you should review your entire investment portfolio. The review ensures it matches your long-term financial goals in the new tax environment.