01 March 2017 / news

Belgian tax on stock exchange transactions: update

In our newsletter of January 24, 2017, we informed you of the extension of the Belgian tax on stock exchange transactions (hereafter “TSET”). An update.

As from January 1, 2017, certain stock exchange transactions, entered into or carried out by intermediaries established outside Belgium, are also targeted by the Belgian TSET.

Meanwhile, the tax return of the TSET has been published and the term for the submission of the tax return and the payment of the TSET has been extended to June 30.

1 Transactions entered into or carried out by foreign intermediaries

Up to December 31, 2016, only stock exchange transactions entered into or carried out in Belgium were subject to the Belgian TSET.

As from January 1, 2017, stock exchange transactions entered into or carried out by foreign intermediaries by order of Belgian residents, are also targeted by the Belgian TSET.

Stock exchange transactions entered into or carried out by foreign intermediaries are considered to be entered into or carried out in Belgium if the order to this transaction was directly or indirectly given by:

Either a natural person having its habitual residence in Belgium;
Either a legal entity on behalf of its registered office or establishment in Belgium.

2 Submission tax return and payment of TSET

2.1 Stock exchange transactions entered into or carried out in Belgium

The obligation to submit a tax return and to pay the TSET due regarding stock exchange transactions entered into or carried out by a Belgian intermediary has not changed.

Belgian intermediaries still need to pay the TSET due on behalf of their ordering clients. They still need to submit the tax return on behalf of the ordering clients.

Belgian intermediaries need to submit the tax return and need to pay the TSET due on the last working day of the month following the transaction at the latest.

2.2 Stock exchange transactions entered into or carried out outside Belgium

a. Responsible party for the tax return and the payment

Foreign intermediaries can request that the Belgian minister of Finance recognise a liable representative in order to submit the tax return and pay the TSET due.

The Royal Decree, including the conditions to be recognised as a liable representative was published in the Belgian Official Gazette on February 22.

If the foreign intermediary does not have a recognised liable representative in Belgium, the ordering client, Belgian resident, has the obligation to submit the tax return and to pay the TSET due.

b. Term for submission tax return and payment of TSET

If the ordering client is the person liable for the payment of the tax, the tax return needs to be submitted and the TSET due needs to be paid on the last working day of the second month following the month in which the transaction was entered into or carried out at the latest.

On the basis of the text of the law, it is not clear if the term of two months only applies when the ordering client himself fulfils the obligations regarding the Belgian TSET, or if the term of two months is also applicable when the liable representative of a foreign intermediary fulfils these obligations on behalf of the ordering clients.

It appears from the tax return that the term for submission and payment, extending to the last working day of the second month following the month in which the transaction was entered into or carried out, only applies when the ordering client himself fulfils the obligations related to the Belgian TSET.

If the liable representative fulfils the obligations related to the Belgian TSET, the liable representative needs to submit the tax return and pay the TSET due on the last working day of the month following the transaction at the latest.

c. Extension of the first term to submit the tax return and pay the TSET

In a press release, the Federal Public Service of Finance announced that the first term to submit a tax return and to pay the TSET has been extended to June 30.

Ordering clients who fulfil the obligations related to the Belgian TSET themselves have until June 30 to submit the tax return and to pay the TSET due related to the months of January, February, March and April 2017.

Liable representatives need to submit the tax return and pay the TSET due related to stock exchange transactions entered into or carried out during January, February, March, April and May 2017 on June 30 at the latest.

We will keep you informed of any further developments.

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