The information below is a brief summary of the Belgian tax regime for investors in Euro Commercial Paper (the ECPs), which is better described in the Information Memorandum from December 15th, 2015.
This summary does not prevent the interested investor from consulting his financial intermediary or the tax administration to know the regime specifically applicable to him. So it might be that your financial intermediary should be obliged to effect certain notifications such as in the framework of the Foreign Account Tax Compliance Act (FATCA).
Additional information is available from the Contact center of the Federal Public Service Finance (Tel.: +32 2 57 257 57, usual rate, available on business days between 8 a.m. and 5 p.m.).
The X/N system of the National Bank of Belgium applies to ECPs. This implies the following :
- For non-exempt investors, there is a withholding tax (the tax rate currently amounts to 30%) on yields from ECPs.
Non-exempt investors mainly include residents of the Kingdom of Belgium such as individuals or certain non-profit-making organizations.
- For certain exempt investors, there is no withholding tax as far as ECPs are held in an exempt securities account opened with the X/N system of the National Bank of Belgium or with a participant in this system.
Exempt investors are the entities included in Article 4 of the Royal Decree of 26/05/1994. This concerns among others:
- investors who are not regarded as residents of the Kingdom of Belgium as far as Belgian taxes are concerned.
- Collective investment undertakings governed by foreign law which have joint assets managed by a management company on behalf of the participants can be exempted only if their shares are not subject to any public issuance in Belgium or are not marketed in Belgium.
- Natural persons and non-profit-making organizations are exempted on the condition that they do not hold ECPs via a Belgian institution (in the sense of Article 229 of the 1992 Belgian income tax code : "Code des Impôts sur les revenus 1992 / Wetboek van de Inkomstenbelastingen 1992") and do not conduct professional activities in the Kingdom as defined in Article 228, paragraph 2, sub-paragraph 4 of the Tax Code).
- all resident companies in the sense of Article 2 of the 1992 Tax Code.
When opening an exempt account with the X/N system of the NBB or with a participant in this system, an exempt investor is required to provide a proof of its status as an exempt investor in a form approved by the Minister of Finance.
There is no continuous statement requirement for exempt investors. However, participants have to deliver annual statements to the X/N system of the NBB as to the exempt status of each investor for whom they hold ECPs in an exempt account.
Taxation of ECPs is mainly governed by the Belgian tax regime specified by the law of 6 August 1993 concerning transactions on certain securities ("Loi du 6 août 1993 relative aux opérations sur certaines valeurs / Wet van 6 april 1993 betreffende de transacties met bepaalde effecten") and the Royal Decree of 26 May 1994 on the withholding tax collection and refund ("Arrêté royal du 26 mai 1994 relatif à la perception et à la bonification du précompte mobilier / Koninklijk besluit van 26 mei 1994 over de inhouding en de vergoeding van de roerende voorheffing"), known as the "X/N regime".
The acquisition or disposal of dematerialized ECPs is not subject to any Belgian stamp, value added tax or other transfer tax.
In the case you are as a natural person submitted to the Belgian tax on securities accounts amounting now to 0.15% on EUR 500 000, it is possible that you should take the initiative for the declaration.
If you are a non-resident natural person, this tax is applied only if you have securities accounts with one or more intermediaries constituted or incorporated in Belgium.