After a long night of negotiations, the Federal Government's so-called "core cabinet" (the Prime Minister and his five deputy PMs) reached an agreement about the capital gains tax on Monday morning.
The ministers' meeting began at 20:00 on Sunday evening and lasted throughout the night. Just after 09:00 on Monday morning, Finance Minister Jan Jambon (N-VA) announced on social media that an agreement had been reached.
The capital gains tax is important to the Flemish socialists of Vooruit, who believe that "those with the broadest shoulders" should also contribute to budgetary efforts. Last August, the government formation discussions nearly collapsed over the topic.
The tax is sometimes also referred to as the "solidarity contribution" by the governing parties. It is a planned tax of 10% on all profits from financial assets, such as shares and cryptocurrencies. In order to avoid placing an additional burden on small investors, the tax only applies to capital gains exceeding €10,000.
What is in the agreement?
The final deal remained close to the framework agreements set out in the coalition agreement. The tax is 10% on the capital gains on financial assets, only applicable if the profit has actually been realised, for example when the shares are sold or transferred. The tax will come into effect on 1 January 2026 and will not be retroactive: there will be no tax on profits realised before that date.
The annual exemption of €10,000 from the coalition agreement has also been retained. This measure is intended to protect smaller savers. However, the amount is indexed each year, and there is a built-in option to increase the exemption to €15,000, although this requires that no profits be withdrawn for five years.
With the annual indexation, this amounts to a basic exemption of just under €20,000 over 18 years.
For entrepreneurs who own at least 20% of their own company, the exemption of €1 million continues to apply. Earlier proposals allowed the 20% to be distributed among the wider family, but this was dropped in the final text.
Pension savings and group insurance are not subject to capital gains tax.
'Closed many loopholes'
Deputy Prime Minister and Health Minister Franck Vandenbroucke (Vooruit) said that "many loopholes have been closed" and that "people in this country will receive social justice and fairness."
The threshold of €10,000 has been retained, but if this profit continues, the threshold can be increased by €1,000 to €15,000 over a period of five years. "This is really something that very rich, wealthy people should contribute to."
The so-called 'Reynders tax' – a tax for those who invest in bonds – will remain in place. "This is a kind of contribution from the past on strong shoulders" and is "not double taxation," he said. There will also be a tax on internal capital gains, he says. The capital gains tax would not apply to pension savings and group insurance.
The aim was "to prevent too many loopholes in the system," but "without disadvantaging those who manage their money well or small self-employed people and small savers," said Foreign Affairs Minister and Deputy Prime Minister Maxime Prévot (Les Engagés). There will also be "annual monitoring" of the measure, with the possibility of adjustments if the "expected return" is not achieved.
"We are doing what we said we would do," said Budget Minister and Deputy Prime Minister Vincent Van Peteghem (CD&V). "We are protecting our hard-working middle class. There will be no additional tax on people's pension savings and group insurance policies. And mums and dads who save for their children will be able to build up a higher exemption," he said.
"The real strongest shoulders are doing their fair share so that we can soon reduce taxes on the wages of our middle class and families. That is what we are all about."
