In a judgment rendered on 17 October 2019, the Belgian Constitutional Court ruled that the national tax on securities accounts is unconstitutional and then annulled the tax, although this annulment did not have a retro-active effect.

The tax on securities accounts was adopted through the Act of 7 February 2018, and applied a rate of 0.15% on the total value of certain securities held with Belgian and/or foreign banks if the average annual value of these securities exceeded EUR 500,000.

As of its introduction, the national tax on securities accounts was controversial and was the subject of numerous actions for annulment.

In ruling the tax unconstitutional and contrary to the principles of equality and non-discrimination, the Court cited the following arguments:

  • Whereas financial instruments such as shares, bonds and warrants fell within the scope of the tax, options, swaps and real estate certificates were excluded;
  • Shares only fell within the scope of the tax when registered on a securities account, but nominal shares were excluded;The tax could be avoided by individuals holding financial instruments with a value exceeding EUR 500,000 when the securities accounts were held by more than one user (to the extent the average proportional value owned by each individual user did not exceed EUR 500,000).

According to the Constitutional Court, these differences in tax treatment could not be justified. The Court has therefore annulled the national tax on securities accounts

To prevent budgetary or administrative difficulties, the Court decided to maintain the effects of the tax for reference periods ending on or before 30 September 2019. As a result, the Belgian state should not be required to reimburse tax for the reference periods from 10 March 2018 till 30 September 2018, and from 1 October 2018 till 30 September 2019.

For reference periods ending on or after 1 October 2019, the tax on securities accounts can no longer be applied.

This judgment of 17 October 2019 will only take effect as of its publication in the Belgian State Gazette.

The Belgian tax authorities will undoubtedly seek to apply this judgment and subsequently claim the tax due for reference periods ending on or before 30 September 2019.

It should nevertheless be possible to persist in appeals that have already been filed against the tax or to appeal against payment of the tax within the applicable time limits.