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End of futures for retail investors in Belgium ?
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End of futures for retail investors in Belgium ?

  #1 (permalink)
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End of futures for retail investors in Belgium ?

Recently Belgian government (desperately looking for income through some new taxes), decided to create a so called 'speculation tax'. The first version was, if you make a profit buying/selling shares in less than 6 months time, you pay 33% tax on the profit, you can not offset losses, losses are 100% for you, while from the good trades, the government takes 33%...

A long time, capital gains were not taxed in Belgium if not speculative.

There was some confusion if this law will apply to derivatives and any other financial products. One side of the government has already announced that it includes all financial products (futures, options, warrants, turbos, ...)

Final verdict falls on Friday...

In my opinion this is just the end of any short term investing in Belgium. It will kill any retail trading business and for sure futures trading.

You need 60% profit / 40% loss to be break even (if loser and winners are equal).

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A bad omen


Maybe a trial balloon that will be tried elsewhere, would be a checkmate if combined with negative interest rates and a ban on physical cash.

The goal is just to confiscate the wealth of the 99% in a hopeless quest to pay the debts that can never be repaid.. The end of savers, everywhere.

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Zondor View Post
Maybe a trial balloon that will be tried elsewhere, would be a checkmate if combined with negative interest rates and a ban on physical cash.

The goal is just to confiscate the wealth of the 99% in a hopeless quest to pay the debts that can never be repaid.. The end of savers, everywhere.

Will keep you posted on the outcome
it's also symbolic, it is part of a political debate called "tax shift"

but these laws are written by people that don't have subject matter expertise
and quickly quickly, to score popular points with socialist voters...

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This just creates more hedging.

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rleplae View Post
Recently Belgian government (desperately looking for income through some new taxes), decided to create a so called 'speculation tax'. The first version was, if you make a profit buying/selling shares in less than 6 months time, you pay 33% tax on the profit, you can not offset losses, losses are 100% for you, while from the good trades, the government takes 33%...

A long time, capital gains were not taxed in Belgium if not speculative.

There was some confusion if this law will apply to derivatives and any other financial products. One side of the government has already announced that it includes all financial products (futures, options, warrants, turbos, ...)

Final verdict falls on Friday...

In my opinion this is just the end of any short term investing in Belgium. It will kill any retail trading business and for sure futures trading.

You need 60% profit / 40% loss to be break even (if loser and winners are equal).

The draft bill targets natural persons only. 34 million € of projected revenues also sound like a bad joke
considering the charging overhead. (Not for Socialist goody two-shoes, I know.)

Looks like a stimulus plan for tax accountants that you will feed via your own futures company in the future ...

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This piqued my interest, and I found the following PwC summary - Tax reform in Belgium 2014/2015 - PwC which highlights speculation tax. Another link, but I don not know the company is here - Belgium: Tax shift and federal budget measures announced by Belgian federal government | Tax Connect Flash | Home | CMS Bureau Francis Lefebvre

Based on both of these items, it appears that capital losses of less than six months can be offset against the capital tax base, i.e. gains of a period shorter than 6 months. While it is annoying, other countries charge capital gains at half your usual rate, i.e. 20% if you pay taxes of 40%, and non-capital gains (less than 6 months) at the full amount. In South Africa you need to hold shares for 3 years for them to be considered capital, and then you still pay taxes on them.

Not sure about the impact on futures positions held longer than 6 months, i.e. some countries regard it is speculative irrespective of the holding period, but you should always be able to offset losses against gains if it relates to the same activity. For instance losses on trading should be deductible from gains on trading, although losses on trading may not always be deductible from other taxable income. Where losses can not be offset against other gains, they are usually carried over and can be offset from profits in future years (ring-fenced). Of course countries can ignore this principle, but in general this is usually how taxes worked in the countries I lived in.

Yes, it is a kick in the nuts if you paid no taxes previously, but there could always be ways to structure this differently. I am pretty sure that there are some creative tax advisers who will be able to draft up legal ways of minimising or delaying taxes in this instance.


Last edited by grausch; October 15th, 2015 at 09:27 AM.
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It looks like the tax aims at stock transactions.

Taxe sur les plus-values : ce qui vous attend - La Libre.be


Are you sure that it applies at futures as well?


This is what I found here:

http://www.cms-bfl.com/Belgium-Tax-shift-and-federal-budget-measures-announced-b...Connect-Flash-31-07-2015


Speculation tax

A ‘speculation tax’ will be introduced on capital gains realized by private individuals on shares in listed companies sold within 6 months from their acquisition. The government specified that the capital losses on such shares will be deductible from the speculation tax base. The tax should apply at the rate of 25% on the net gains realized as from 2016.

Under the current regime, capital gains on shares (in listed or non-listed companies) realized by private individuals are not taxable unless they are derived from speculative and/or abnormal activities, falling outside the scope of the ‘normal management of one’s own private estate’, in which case the capital gains on shares are taxable at the rate of 33%. Although it has not yet been clarified how the speculation tax will be implemented, it therefore appears that the speculation tax in some cases may result in a tax decrease from 33% to 25% in practice.

This speculation tax will co-exist with the previously announced ‘cayman tax’, which targets income from certain legal constructions (e.g. foreign trusts, foundations) in the hands of Belgian individuals.

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Fat Tails View Post
It looks like the tax aims at stock transactions.

Taxe sur les plus-values : ce qui vous attend - La Libre.be


Are you sure that it applies at futures as well?


This is what I found here:

Belgium: Tax shift and federal budget measures announced by Belgian federal government | Tax Connect Flash | Home | CMS Bureau Francis Lefebvre


Speculation tax

A ‘speculation tax’ will be introduced on capital gains realized by private individuals on shares in listed companies sold within 6 months from their acquisition. The government specified that the capital losses on such shares will be deductible from the speculation tax base. The tax should apply at the rate of 25% on the net gains realized as from 2016.

Under the current regime, capital gains on shares (in listed or non-listed companies) realized by private individuals are not taxable unless they are derived from speculative and/or abnormal activities, falling outside the scope of the ‘normal management of one’s own private estate’, in which case the capital gains on shares are taxable at the rate of 33%. Although it has not yet been clarified how the speculation tax will be implemented, it therefore appears that the speculation tax in some cases may result in a tax decrease from 33% to 25% in practice.

This speculation tax will co-exist with the previously announced ‘cayman tax’, which targets income from certain legal constructions (e.g. foreign trusts, foundations) in the hands of Belgian individuals.

You are correct this (only applicable to stocks bought/sold within 6 months) was the initial plan from early announcements, but then this week a clarification from a government member was that it includes all financial instrument with exception of some funds.

It clearly illustrated that the decision had so many holes and black spots in it, that it was decided that the core government would assemble today and decide about the open ends...

Belgium will most likely be the only country in the world to my knowledge, where you pay 33% on every single profitable transaction and where you can not offset looser.

It would be acceptable that per annum, you can not offset losses, but at least within the year, that some mistrades can be deducted from your profit and you only pay taxes on the total profit.

It doesn't really give an impression of subject matter expertise on that matter
it is rather short term populist trophee hunting..

We should know later today...

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This starts to look like a SOAP :

This new speculation tax is also applicable on warrants. But it is not yet clear (read : they didn't find an agreement yet) if it is also applicable to options and other derived products (futures, ...)

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