Cryptocurrency taxation in Belgium

Cryptocurrency taxation in Belgium stands out from that in France and other European countries. Indeed, the calculation method and tax obligations are not the same. But then, what are these differences, and what must be declared as a Belgian tax resident? Let’s look into this in detail throughout this article 🙂

What is the tax situation for cryptocurrencies in Belgium? ⚖️

In Belgium, there is no dedicated regulatory framework for crypto taxes. As a result, the existing Belgian tax regime for traditional stock market operations is also applicable to cryptocurrencies, even though it may not seem the most appropriate.

However, the Belgian Tax Administration is equipped with an Advance Ruling Service (ARS) that allows any taxpayer to obtain a decision on the tax consequences of an operation or a future situation. The decisions made help understand how tax regimes are applied to cryptocurrencies.

The different investor profiles in the taxation of cryptocurrencies in Belgium

The different rules and tax obligations depend on one key point: your investor profile.

Depending on the determination retained, you will have additional declaration obligations, or on the contrary, you could be completely exempt from tax in some cases. Here are the three profiles:

• The good household manager (understood as the person acting within the framework of a normal management of their private wealth)
• The speculator: anything not performed within the framework of normal private wealth management will entail abnormal management and therefore a determination of speculator profile.
• The professional: this is understood as the person who carries out a professional activity that can be main or ancillary with the acquisition of professional techniques and equipment.

Not all investors will be subject to the same obligations, and several types of income will be subject to different declarations as well as different tax rates. At Waltio, we have developed a questionnaire to help you discover your investor profile.

What are the tax obligations for Belgian investor profiles? 👥

Two tax obligations will stand out in Belgium, but not all profiles will necessarily be subject to both obligations.

First tax obligation: declaration of capital gains

The taxable event is currently debated in Belgium. Some legal professionals consider that the sale/conversion of one cryptocurrency for another cryptocurrency will be a taxable event, while others consider that only transactions of cryptocurrency – fiat/goods/services will be taxable.

Depending on the interpretation chosen, the calculation method must be applied to each transaction to obtain the total amount of capital gain or loss.

The calculation method is the FiFo (first in, first out) method, and the net gain will be calculated by the formula: sale price – (acquisition price – transaction fees).

If the result of all your disposals shows a capital gain, it will be subject to the diverse income tax regime and will be taxed at a flat tax of 33%.

Example: On February 2, 2022, I buy 1 ETH for a fiat value of 2,000 euros.

On June 16, 2022, I sell 1 ETH for a fiat value of 3,000 euros, including 50 euros of transaction fees.

The calculation will be as follows: 2,000 – (3000 – 50) = 950 euros of capital gains.

I must declare 950 euros as diverse income and will be taxed on 33% of this gain, which means a tax of 313 euros.

💡 This obligation to declare and pay the tax will only apply to speculator and professional profiles. The good household manager is completely exempt from this obligation!

Second tax obligation: declaration of passive income

Certain operations in cryptocurrencies can lead to passive income that can be received as interest. This is particularly the case for farming, staking, lending operations… These operations could be integrated into movable income and would be taxed at a rate of 30%.

The taxable event will be the perception/receipt of these gains on your accounts and wallets. You will therefore have to declare these gains according to their fiat market value on the day of receipt.

Example: I receive 0.10 ETH from staking for a value of 100 euros on the day of receipt on my Metamask.

I must declare 100 euros as movable income and will be taxed on 30% of this gain, which means a tax of 30 euros.

💡This obligation applies to all profiles! The good household manager, even if exempt from declarations and tax on capital gains, must always declare and pay the tax amount on their income as soon as they have carried out operations generating passive income.