Within the framework of different budgetary measures, the Belgian government has significantly broadened the scope of the tax on stock exchange transactions (hereafter « TST »). This legislative amendment will have an impact on Belgian residents (both individuals as corporates) who have a non-Belgian bank account on which certain securities transactions are carried out and on Belgian residents who trade via a foreign internet platform.
1.1. Concerned transactions
The TST applies to certain secondary market transactions (sale, purchase, exchange) on Belgian or foreign “public funds”, i.e. securities which, by their nature, can be publicly traded, such as shares, bonds, units of collective investment funds, certificates,... The TST applies to both listed and non-listed securities.
Up to January 1st, 2017 the TST was only applicable to secondary market transactions, concluded or carried out with intervention of a professional intermediary established in Belgium, i.e. Belgian financial institutions and Belgian branches of foreign financial institutions.
In respect of the transactions concluded or carried out in Belgium, the TST is due by the aforementioned professional intermediaries established in Belgium, who deduct the amount of TST from sums due to the Belgian client.
2.1. Concerned transactions
As of January 1st, 2017 the transactions carried out by intermediaries established abroad will equally be subjected to the TST, provided that the purchase or sale order is given – directly or indirectly - to the intermediary established abroad by:
The new TST not only targets transactions carried out by foreign banks, but also transactions over the internet by foreign entities offering, from abroad, a platform for Belgian investors.
Moreover, it is not relevant if the foreign professional intermediary, which carries out the purchase or sale, has any establishment in Belgium.
Henceforth, if the transaction is carried out by a professional intermediary abroad, the ordering party shall be deemed liable for the TST, unless he provides evidence of payment of the tax (by either the bank or a fiscal representative).
Up to 2017, the TST was triggered by the intervention of a Belgian professional intermediary. As from 2017, the TST will be triggered in case the order is given by a Belgian natural person or legal entity (cfr. supra).
In accordance with the new Belgian legislation, the TST shall from now on be due if a foreign, non-Belgian bank carries out a qualifying secondary market transaction on behalf of a Belgian client. Although, as a rule, the Belgian client will be liable for the TST, foreign banks may, for commercial motives, opt to take over the reporting and paying responsibility of their clients by doing the reporting and payment of TST themselves or by appointing a fiscal representative. Anyway, the Belgian client will depend on the information provided by the foreign bank in order to be able to comply with his/her TST obligations in case the reporting and payment of the TST would not be done by the bank.
The new TST rules give rise to a number of practical questions and concerns:
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