Belgium: Stock exchange tax upheld by Constitutional Court

Belgium: Stock exchange tax upheld

The Belgian Constitutional Court in a June 2020 judgment held that the Belgian stock exchange tax is compatible with EU law.


Related content


Effective 1 January 2017, the scope of Belgian stock exchange tax was broadened to cover transactions conducted on behalf of Belgian tax residents via a foreign intermediary or (internet) trading platform.

Several actions challenging the expanded tax were brought before the Belgian Constitutional Court. It was asserted the new legislation was incompatible with the Belgian Constitution (principle of equality) and the EU free movement of capital and the freedom to provide services. As was contended, the tax made it more expensive and administratively burdensome for a Belgian tax resident to invest via a foreign intermediary.

The Belgian Constitutional Court referred questions to the Court of Justice for the European Union (CJEU) which in January 2020 found that the new measures introduced a difference in treatment that could discourage Belgian residents from using foreign intermediaries and thus results in a restriction on the freedom to provide services but that this difference in treatment and related measures were proportional and justified by overriding reasons—namely, to provide for effective tax collection and fiscal supervision and to combat the evasion tax. Read TaxNewsFlash

The case was thus ready for consideration by the Belgian Constitutional Court.

Decision of the Constitutional Court

Taking into consideration the CJEU judgment of 30 January 2020, the Belgian Constitutional Court held that there was a difference in treatment, but that this difference was based on an objective criterion—namely the place of establishment of the intermediary called upon by the Belgian resident giving the order. This criterion was relevant since it related to the obligation for each Belgian resident to pay tax on their exchange transactions.

The dual purpose of the law—avoiding unequal competition between intermediaries established in and outside Belgium as well as increasing legal certainty—was considered to be legitimate.

The court also referred to the possibility for a foreign intermediary to appoint a liable representative in Belgium, to whom the obligations relating to the declaration and payment of the tax may be assigned and the possibility for a Belgian resident (ordering party) to appoint a proxy-holder to declare and pay the tax on that taxpayer’s behalf. Consequently, the Constitutional Court held the legislation was fully applicable.

KPMG observation

Belgian investors and foreign intermediaries need to be aware of the CJEU judgment (January 2020) and the decision (June 2020) of the Belgian Constitutional Court. Still, there are other practical and legal issues of the Belgian stock exchange tax. For instance, imposing the stock exchange tax on mandatory corporate actions that are concluded or executed via a foreign intermediary may seem contrary to the law, absent a direct or indirect order by the investor.

Read a June 2020 report prepared by the KPMG member firm in Belgium

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us


Want to do business with KPMG?


loading image Request for proposal