Crypto Tax Legislation & Law in Belgium

There is no specific legislation regarding the taxation of crypto-assets in Belgium. General tax law principles apply.

There are three main possible qualifications with regard to income tax treatment of the capital gain incurred by the exchange of crypto-assets for conventional FIAT currency, determined by the specific facts of each case:

1. the operation falls within the scope of the normal management of a private estate: in this case, any income generated is not taxable and does not have to be declared.The normal management of a private estate can be defined as acts that a prudent person performs, not only for the current management, but also for the fruition, realisation and reinvestment of elements of estate. It relates to operations that are not carried out with a speculative intent and that do not acquire, by their frequency, the character of a professional activity.
2. the operation exceeds the normal management of a private estate, without constituting a professional activity: in this case, it is considered as miscellaneous income and taxable at a flat rate of 33%
3. the operation constitutes a professional activity: see Q4 below.

Criteria that are generally taken into account by the Belgian ruling committee regarding crypto-currencies to classify the operation are, for example:

• holding period
• number and frequency of transactions
• importance of the crypto-investment compared to the rest of the estate
• way of financing the operation (with one’s own funds or through a loan)
• being active or not on crypto-related forums or blogs
• way of coming into possession of the crypto-currencies, etc.

Although these criteria can give a certain “reading grid” for crypto-currencies, strictly speaking it remains unclear to what extent such criteria apply to other kind of tokens.

Due to the lack of legal certainty, it is strongly recommended to request a (binding) pre-emptive administrative ruling in order to confirm the personal tax treatment of an operation involving crypto-assets.

The exchange of crypto-assets for goods/services or for other crypto-assets follows the same tax treatment as for conventional FIAT currency.

If the transaction does not have a EUR value (e.g. if BTC is exchanged for ETH), an appropriate exchange rate must be established in order to convert the transaction to EUR.

Reasonable care should be taken to arrive at an appropriate valuation for the transaction using a consistent methodology.

The concept of professional activity has no legal definition. Case law defines professional activity as a set of operations that are sufficiently frequent and linked together to constitute a continuous and usual occupation. It is therefore a question of fact. Some criteria have been brought up by the Belgian Ruling Committee, e.g. the fact of investing for others, to have bought or sold assets via an automated process or via an automatic software, or being professionally involved in the crypto-currency sector, etc.

Should the exchange of crypto-assets be considered as the individual’s professional activity, the income generated is considered as professional income subject to personal income tax at progressive rates of up to 50%, to be increased with municipal surcharges. Social security charges are also due.

The possibility to offset losses depends on the qualification of the income:

• if the income falls within the scope of normal management of a private estate, it is not possible to offset losses
• if the income  qualifies as miscellaneous income, it is possible to offset losses on any income falling into the category of miscellaneous income, even if it is not crypto-related (e.g. speculative capital gains on shares)
• if the income qualifies as professional income, it is possible to offset losses on any income falling into the category of professional income only, even if it is not crypto-related.

The offset of professional losses is unlimited in time but must be done in each tax year in which there are profits. If the individual fails to offset a loss in a given tax year where he/she had profits, it will not be possible to offset it in a later tax year.

The same applies to offset of losses related to miscellaneous income, except that the “carry forward” is limited to 5 years.

There is no specific tax legislation regarding NFTs. In the context of a parliamentary question, the Minister of Finances stated that the sale of NFTs should have the same tax consequences as the sale of any other property. Although it could be subject to discussion, a recent administrative ruling (2022) confirmed in a specific case that the sale of NFTs follows the same tax regime as crypto-currencies.

There is no specific tax legislation with regard to mining. The general tax principles apply, as described above with regard to the exchange of crypto-assets. The Belgian tax administration tends to consider that mining is generating professional income or, at least, miscellaneous income.

There is no specific tax legislation with regard to staking. The general tax principles apply (see above). There is no difference between the validator and the delegator as such.

The tax treatment of tokens awarded in the framework of staking activity (“rewards”) is currently particularly uncertain in Belgium. It seems that the EUR value (at the time of receipt) could be qualified, depending on the case, either as movable income (such as an interest/dividend taxed at 30%) or as a capital gain.

The general tax principles described above apply to those events/models.

Certain types of crypto-assets can also generate taxable income without any exchange, as is the case for e.g. security tokens:

1. Equity token: income taxed at 30% (similar to dividends)
2. Debt token: income taxed at 30% (similar to interests).

There are no specific monitoring, documentation and declaration requirements linked to crypto-assets.  However, certain platforms consider themselves as financial institutions, subject to compliance duties related to automatic exchanges of information (CRS, FATCA).

Furthermore, Belgian tax residents have an obligation to declare foreign bank “accounts” to the National Belgian Bank (NBB) and in their annual income tax return. The question arises as to whether crypto-assets fall within the scope of this obligation. Although the term “account” has a very broad meaning, it has been confirmed by the Minister of Finances that it must be held within a foreign bank institution, exchange institution, credit institution or savings institution established abroad. Depending on the status of the institution where the crypto-assets are held (if any), some crypto-wallets are currently subject to the obligation to report to the NBB, others are not.

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