Taxation of crypto in Belgium: when is crypto taxable?
- Aeacus Lawyers
- Jul 17
- 6 min read
Now that the crypto bull market appears to be back in full swing and many cryptocurrencies have seen significant increases in value, we've recently received a lot of questions from concerned crypto investors about tax treatment and whether they have to pay taxes on their crypto profits.
In the overview below, we aim to clarify the broad outline of the tax rules and the taxation of crypto profits for individuals with tax residency in Belgium. We will also indicate when crypto profits are taxable.
First Scenario: Normal Management of Private Assets (not taxable for the time being)
If the investment in cryptocurrencies is considered an integral part of the normal management of a private estate, the realized capital gain may, in principle, be exempt from tax. Whether or not the criteria for normal management are met is a matter of fact. The following factors are generally taken into account:
The method of acquiring the crypto coins (own resources, loans, inheritance, etc.);
The length of time the crypto coins are held prior to sale;
The frequency of buying and selling transactions in cryptocurrencies ;
The investment strategy regarding cryptocurrencies, such as: buy & hold , trending, day trading , scalping and arbitrage;
The involvement in mining activities;
The use of specialized software and other specialized equipment;
The percentage of total assets invested in cryptocurrencies (preferably less than 25%);
Which cryptocurrency did you buy? Bitcoin and Ethereum are considered less speculative than, for example, Dogecoin , Shiba Inu or a coin with a small market cap.
If you hold cryptocurrencies for a longer period of time, they will generally be considered normal private asset management and therefore do not need to be declared in your tax return.
The new coalition agreement includes the introduction of a 10% capital gains tax on crypto profits, eliminating the current exemption for crypto capital gains. This tax will not take effect until 2026, with an exemption for capital gains realized before that date.
Second Scenario: Speculative Income (33% tax)
If the tax authorities believe there is speculation, the profits made from cryptocurrencies will be taxed as miscellaneous income at a fixed tax rate of 33% (plus municipal surcharges).
This applies when cryptocurrency trading is more focused on quick profits (day trading) and risky speculation (using debt financing/loans to purchase crypto).
In this context, it is relevant to cite a parliamentary question from May 9, 2000, submitted by Vincent Van Quickenborne, concerning the tax on speculative income and the interpretation of "abnormal speculative intentions." According to the then Minister of Finance, speculative actions are characterized by risky transactions aimed at price fluctuations with the potential for large profits or losses.
Characteristics that may indicate speculation include: a short holding period, a significant difference between the purchase and sale price, the use of borrowed money, and an investment that is disproportionate to one's personal assets. The minister emphasized that each situation must be assessed individually, based on the specific facts and legal context. It is noteworthy that with repeated speculative transactions, the income can even be taxed as professional income (see below).
Third Scenario: Professional Income (Progressive Rate )
In a third scenario, the tax authorities may consider the crypto investing activity to be professional, particularly in the case of frequent cryptocurrency trading, such as that of day traders. In this case, the profits earned can be taxed as professional income and subsequently subject to progressive tax rates, which can reach up to 50% in Belgium. Moreover, social security contributions will also be due.
Frequency and Recurrence : Regular and repeated crypto transactions.
Interconnectedness : Transactions with a common goal.
Continuity : Structural and ongoing activities, similar to a business.
Organization : Use of resources such as personnel, office space, or tools.
Link with other professions : Involvement in other crypto-related professional activities reinforces the professional nature. The absence of another (full-time) professional activity can also be an indication of the professional nature of crypto profits.
Profit potential : Activities must be capable of generating profit, although profit is not mandatory.
Experience and an analysis of existing rulings show that the decision to deem crypto a professional income is not readily made. Nevertheless, it's important to be mindful of this, as the fiscal and social consequences can be far-reaching.
Fourth Scenario: Movable Income (30%)
Besides potentially realizing capital gains/profits on your crypto investments, you can also generate passive income through your cryptocurrencies. We're thinking specifically of staking , lending , liquidity rewards, and air drops .
It is possible that such income qualifies as taxable income from movable assets (taxed at 30%) or as income from movable rental (also taxable at 30%, but a cost allowance can first be applied, which reduces the real tax burden).
What about passive income you earn on a foreign platform like Coinbase, Binance, Kraken, BLOX , etc.? You run the risk of paying taxes twice on the same income (withholding tax of typically 15% in the country where the platform is located, and then another 30% in Belgium on the balance where you're taxed on your worldwide income).
Tax Ruling
To obtain legal certainty regarding your personal tax situation, it may be advisable to request a ruling from the FPS Finance. A tax ruling, also known as an advance tax decision, is a formal procedure through which a taxpayer can obtain advice and clarity from the tax authorities before a specific transaction regarding how certain tax rules will apply to that situation.
It is important in this context that you request a ruling or advice before selling your crypto coins.
Some practical examples
Advance decision 2022.1049: harvesting income as movable income
In this decision, the applicant requested certainty regarding the taxation of his income from harvesting on the Symbol blockchain. Harvesting This is the process by which a node validates transactions and receives rewards in the form of new cryptocurrencies. The applicant had invested in cryptocurrencies such as Bitcoin, NXT, and NEM. Through the Symbol Network, they received new cryptocurrencies through an opt-in mechanism. These rewards were obtained by validating transactions via the "Proof-of-Stake+" consensus mechanism, where nodes are randomly selected based on their "importance score."
The Advance Rulings Service (DVB) concluded that the income the applicant received for his contribution as a validator should be considered income from movable assets. According to Article 17, § 1, WIB 92, income from movable assets or capital falls under this category. This means that income from harvesting is taxed at a rate of 30%. The decision clarifies that such payments are not tax-exempt and are considered income in kind.
Advance decision 2022.0911: staking and liquidity rewards as miscellaneous or movable income
Another ruling was submitted by an applicant who worked as a software developer and consultant. He asked the DVB to confirm that his income from staking and participation in Decentralized Finance (DeFi) projects would not be considered professional income, but rather income from personal assets.
The DVB analyzed the situation and determined that the applicant's activities did not meet the criteria for professional income, as defined in Article 23, WIB 92. The income was generated without professional advice or investments by his company, and the crypto investments were financed with private assets without the use of loans.
Regarding the nature of the income, the DVB determined that capital gains from the sale or exchange of crypto assets could be classified as miscellaneous income under Article 90, paragraph 1, 1°, of the Income Tax Code 92. Furthermore, staking rewards and liquidity rewards were primarily considered income from movable assets, which is taxed at a rate of 30%. However, if the income does not fall under movable property or capital, it is classified as miscellaneous income and taxed at a rate of 33%.
This ruling provides clarity on the tax treatment of staking and liquidity mining, emphasizing that the exact tax treatment depends on the specific nature of the income.
Crypto tax and obligations
The above rulings make it clear that taxpayers must correctly declare their crypto income in their annual personal income tax return. This means that, unlike dividends, for example, where withholding tax is often automatically withheld, the responsibility for declaring crypto income lies with the taxpayer.
If you have any questions about declaring your crypto accounts, please read our article
It's crucial to stay informed about developments in tax regulations surrounding crypto. Rules change rapidly, and careful filing can help avoid fines and back taxes.
Do you have questions about your specific situation and whether your trades can be considered normal private asset management? Schedule a no-obligation consultation using the button below. During this meeting, we'll discuss your specific situation in detail, and you'll immediately receive our initial insights.
If you have any other questions about crypto, be sure to check out our Frequently Asked Questions (FAQ)
Christophe Romero Senne Verholle
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