Belgian tax: the profile of a prudent manager

In Belgium, you will need to determine your investor profile to know what your tax obligations will be. There are three crypto investor profiles:

1. The prudent manager.
2. The speculator.
3. The professional.

In this article, we will only address the Belgian crypto investor profile of the prudent manager. While many consider themselves to be of this profile, it turns out that the qualification as a “prudent manager” is much rarer than it appears.

▶️ What is the prudent manager from a fiscal point of view?

In Belgium, there is no specific tax regime for digital assets. The concept is drawn from the existing tax regimes applicable to traditional finance operations.

There are no criteria that clearly define this notion of “prudent manager”. This profile corresponds to the person who acts in the context of “normal management of his private wealth as a “prudent manager” (Article 90, 1° CIR92).

Normal management is a vague and complex term. Based on the decisions made by judges and the tax administration, normal management is understood as low-risk, almost passive management of one’s wealth. To caricature, the prudent manager thinks about the future while ensuring the present, the operations are very low risk, the returns are low, and the amounts invested are not representative of his available liquid savings.

The situation must therefore be approached on a case-by-case basis through a set of indicators allowing for the qualification of the profile:

• What proportion of wealth is invested and held in cryptocurrency?
• What is the taxpayer’s income level?
• Are purchase and sale operations common?
• Are more complex operations carried out (margin, futures…)?
• What is the investment horizon?

The difficulty is that the profile determination is often made by the taxpayer themselves, with the administration not intervening at this stage. However, a document containing a list of 17 questions has been produced by the Advance Rulings Service of the tax administration to help the taxpayer determine themselves. This list of questions is, of course, not exhaustive and must be able to adapt to all cases.

To know if you are considered a prudent manager, you must therefore self-analyze or call on a legal professional who can accompany and advise you. At Waltio, we have developed a questionnaire that allows you to quickly determine your investor profile. We invite you to fill it out to be certain of your qualification.

▶️ Prudent manager and cryptocurrency: compatible?

Referring to what has been stated above, the prudent manager should be the person who takes very few risks with his wealth and acts with the aim of long-term growth without seeking performance. However, the reality is much more nuanced. The cryptocurrency market is inherently risky, and investors often seek a rapid return as a result. This does not mean that a person investing in cryptocurrency is automatically excluded from the qualification. The typical case of a taxpayer who has invested little and does not carry out or few operations over several years with the aim of “holding” could be qualified as a prudent manager. The qualification is nevertheless complex to obtain when one is exposed to such a risky and volatile market…

▶️ What are the fiscal obligations of the prudent manager? What is their crypto tax?

Exemption from declaring capital gains:

Good news! In Belgium, the prudent manager will be exempt from crypto taxes! At least on capital gains. Concretely, if you have realized capital gains during the year, you will not have to pay tax, and you do not have to declare your operations.

⚠️ This exemption only concerns realized capital gains.

Declaring passive income:

The prudent manager will still have to pay tax on their cryptocurrencies…

They will have to declare their passive income (receipt of staking gains, farming, play-to-earn gains…). These incomes are taxable when they are received in the wallet, regardless of a potential resale. The taxable event is therefore the receipt/perception. They must be declared as “movable income” and will be subject to a specific flat tax of 30%.

Do you want to declare your crypto income in Belgium? The first crypto tax accounting software in Belgium and number one in France, Waltio supports holders of digital assets in their procedures by offering personal support adapted to their situations. To benefit from our services or for any information requests, you can visit our website or send us your specific requests by email at support@waltio.com.

Disclaimer: Our tool and our team strive to support you as best as possible in fulfilling your tax obligations, Waltio does not provide financial and tax advice.