The majority of countries in the world do not have crypto-specific taxation and Belgium is no exception, no dedicated regulatory framework exists for crypto taxes.
Consequently, the Belgian tax regime reasons by analogy with other existing tax laws to allow taxpayers to declare their various crypto incomes.
The basis of the regime is a ruling published in 2017 by the SDA, the tax administration's advance ruling service, which allows any taxpayer to obtain a ruling on the tax consequences of a future transaction or situation.
What are the tax obligations for holders of crypto assets in Belgium?
Not all investors will be subject to the same tax obligations in Belgium!
The key point will be the notion of "good father", meaning the person who acts within the framework of normal portfolio management.
Normal management is defined according to several different criteria such as low-risk or long-term investment horizon.
In concrete terms, if you act as a good father, you will not have to pay any tax on crypto capital gains! Good news, isn't it?
However, Belgium has two types of taxes:
A capital gains tax, applicable at the time of transfer - Miscellaneous income;
A tax on passive gains (staking income, farming), applicable on receipt of the gain - Income from movable property.
Tax on passive gains will always be due, even if you act like a good father...
As you will have understood, the investor profile is crucial to know your capital gains tax on crypto assets.
Waltio allows you to have a free and quick estimate of your investor profile regarding your taxation and also allows you to retrieve all your transactions, analyse your taxable disposals and thus, calculate your capital gain or loss and guide you in your tax declaration.
Now that you know your investor profile, let's take a look at the tax obligations for each profile.
What are the tax obligations for different crypto-currency investor profiles?
To find out whether or not he will be taxable, the Belgian individual taxpayer must fill in a questionnaire, proposed by the tax authorities, to determine his investment profile.
Good family man
This is the profile of the person who has passive and normal management of his portfolio, who does not take too much risk and who has a desire to protect his assets. A small part of their wealth is invested in the crypto-currency asset class and the investment horizon is long term.
What are the tax obligations of a good family man?
The good family man is not subject to tax on capital gains made on the purchase and resale of crypto-currencies. Therefore, there is no declaration to be made under miscellaneous income.
However, for taxpayers generating passive income by staking or farming, there is an obligation to declare gains as income from the movable property at the applicable rate of 30%.
I receive 0.10 ETH from staking for a value of 150 euros.
I declare 150 euros as income from movable property.
I will be taxed at 30% on this value.
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This is the profile of the person who seeks returns and is active in managing his or her portfolio. The risk-taking is greater, the invested assets are large in relation to the taxpayer's overall assets. This profile reflects the desire to make the portfolio grow significantly rather than to protect it.
For example, multiplying buy and sell orders, having a short-term horizon (less than one year), having several dedicated trading platforms. Carry out speculative operations, such as derivatives, and use leverage.
What are the tax obligations of the speculator?
Unlike the good father, the speculator is subject to taxation when reselling crypto-currency against a good/service or against a legal tender such as the euro. There are also interpretations that crypto/crypto transactions are taxable.
The capital gains made are taxed at 33% as miscellaneous income.
Concerning staking, farming, this does not change, the income received is taxed at the rate of 30% as income from movable property.
Here the taxpayer who makes cryptocurrency trading his profession and his main source of income is concerned. A methodological and diligent organisation with established processes enshrines this specific type of profile. Certain criteria directly determine the professional such as the activity of crypto-currency mining or the frequent use of complex financial products such as futures, forward contracts or CFDs.
What are the tax obligations of the professional?
Professional crypto-currency traders will be taxed on crypto gains at the progressive rate of business income tax set at between 25 and 50% in the category of industrial, commercial or agricultural business profits.
How do I calculate my capital gains or losses?
Gains made when reselling your cryptocurrencies are called capital gains and will be subject to taxation as miscellaneous income unless these gains are made as part of the normal management of your assets as we have seen previously.
The taxable transactions are as follows:
Transferring a cryptocurrency to a fiat currency
Transfer of a cryptocurrency for the purchase of a good/service
Transferring a cryptocurrency to another cryptocurrency: This is subject to much debate as the legal rules are unclear.
For each taxable transaction, the calculation of the capital gain or loss will have to be carried out using the FIFO calculation method (again, some interpretations provide for the LIFO method).
Once this has been done for all the transactions considered taxable during the year, a balance will be drawn between the transactions that have resulted in capital gains and those that have resulted in capital losses.
If the total is positive, then you have made a capital gain which will be taxed at the rate of 33%.
If the total is negative, then you have a capital loss and will not have to pay tax.
When should you declare your cryptocurrencies to the Belgian tax authorities?
The opening date of the tax return in Belgium is not specified when writing this article, last year in 2022 for the tax year 2021, the opening date was 27 April.
Regarding the closing dates for this year, the deadlines for the end of the tax return are specified.
You can file your tax return in paper form yourself until 30 June 2023.
For online filing, on the dedicated website MyMinfin the deadline is set at 15 July 2023.
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