Welcome to NexusFi: the best trading community on the planet, with over 150,000 members Sign Up Now for Free
Genuine reviews from real traders, not fake reviews from stealth vendors
Quality education from leading professional traders
We are a friendly, helpful, and positive community
We do not tolerate rude behavior, trolling, or vendors advertising in posts
We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community. It's free for basic access, or support us by becoming an Elite Member -- see if you qualify for a discount below.
-- Big Mike, Site Administrator
(If you already have an account, login at the top of the page)
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).
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.
"If we don't loosen up some money, this sucker is going down." -GW Bush, 2008
“Lack of proof that something is true does not prove that it is not true - when you want to believe.” -Humpty Dumpty, 2014
“The greatest shortcoming of the human race is our inability to understand the exponential function.” Prof. Albert Bartlett
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 ...
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.
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..
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, ...)
