The Federal Parliament has approved the introduction of the capital gains tax. The Finance Minister Jan Jambon’s (Flemish nationalist) draft bill received the support of MP’s from the federal coalition parties as well as from the opposition Francophone socialists and the far-left PVDA/PTB. The far-right Vlaams Belang, the Flemish liberals and the Francophone federalists voted against, while the Francophone and Flemish greens abstained.
For the Flemish socialists the introduction of a capital gains tax was a condition for joining the federal coalition. Once fully operational It is expected to generate 500 million euros. Although the law has only just been passed, the tax has been in force since 1 January, a under a transitional arrangement.
Broadly speaking, the tax amounts to 10% of the capital gained on the sale of assets. The first 10,000 euro (per person) is exempt with an exemption of 20,000 couple married under the community of property regime.
An additional 1,000 euros may be added to that amount each year if investors do not realise a gain through sale, subject to a ceiling of 15,000 euros, or 30,000 euros for couples.
Investors that hold at least 20% of the shares in a company are entitled to an exemption. This applies to the first tranche of 1 million euro per five-year period. Above that amount, a progressive rate applies, that rises 10% withholding tax on capital gains exceeding 10 million euro.