How to apply for an advance tax ruling on crypto yourself?
We increasingly receive questions from investors regarding the tax treatment of crypto assets and the possibility of applying for an advance tax ruling. Due to DAC8, the expansion of reporting obligations for crypto assets, and the increased exchange of information between platforms and tax authorities, crypto investments are becoming increasingly visible to the tax authorities. We therefore make this editable template (Word document) available free of charge for taxpayers who wish to obtain prior tax certainty regarding the normal management of private wealth. Additional practical information can be found via this link.
Practical Guidelines for Completing the Template
Once the above template (in dutch) has been downloaded, we kindly ask you to complete all relevant information where necessary. At the beginning of the document (see “Tick the applicable boxes”), you should indicate precisely for which matter an Advance Tax Ruling is being requested. In practice, this will generally concern the first and/or the third checkbox.
For the sake of completeness, we note that this template may be used both for a formal ruling application and for an anonymous prefiling request.
Under Title 1, we recommend answering the questions as comprehensively as possible and, where relevant, attaching the necessary supporting documents (for example transaction overviews, portfolio summaries, tax reports, screenshots, etc.).
As regards the motivation, in most cases it is generally sufficient to refer to Title 1 (the description of the facts and the intended transaction), stating that, based on those elements, you are of the opinion that the situation qualifies either as the normal management of private wealth or as miscellaneous income.
We recommend submitting the application directly by email to the Advance Tax Rulings Office at dvbsda@minfin.fed.be.
Naturally, this template offers no guarantee whatsoever of obtaining a positive advance tax ruling.
When Does One Typically Qualify for a Positive Ruling Regarding the Normal Management of Private Wealth?
Based on existing ruling practice, private individuals without a professional or occupational connection to crypto assets are generally the most likely to obtain a positive ruling confirming the normal management of private wealth.
In this respect, the Belgian Ruling Commission takes into account various factual elements, including the number of transactions, the holding period, the use of borrowed funds and the investor’s professional background.
In practice, files involving a relatively limited number of transactions (maximum 36 per year), limited use of borrowed funds and a longer holding period generally appear to have a higher likelihood of obtaining a favourable ruling.
For more information regarding advance tax decisions (“tax rulings”) relating to crypto-assets, we refer you to our more detailed article. If you are uncertain about the tax qualification of your crypto income or crypto capital gains, we also refer you to our comprehensive article explaining the various tax categories and their treatment in greater detail.
Request a Prefiling for Your Crypto Transactions?
An application for an Advance Tax Ruling is, in principle, not submitted anonymously. In practice, however, we observe that in more complex or less straightforward cases, taxpayers often first opt for an anonymous prefiling through a representative, such as a law firm, before formally submitting a ruling request in their own name.
A prefiling request concerns a prior and informal discussion of a case with the Belgian Ruling Commission, during which it is generally assessed anonymously how the tax authorities may evaluate a specific situation or proposed transaction in the context of a formal ruling request. Neither the taxpayer nor the ruling commission is formally bound by the positions taken during this phase.
An anonymous prefiling may be particularly appropriate in borderline cases where it cannot be determined with certainty whether the tax authorities will classify the file as normal management of private assets or as miscellaneous or professional income. Since such prefilings are in principle conducted anonymously and no identifying details of the taxpayer are disclosed, nothing is generally “lost” in practice. Merely presenting a situation informally does not automatically result in tax audits or further investigations.
If the prefiling indicates that the Belgian Ruling Commission sees little room for a positive ruling, it may still be decided not to proceed with a formal ruling application.
Need help?
The template should in principle be sufficiently clear to allow you to prepare an application for an Advance Tax Ruling yourself. Should you nevertheless have any questions regarding this template, encounter uncertainties when completing it, or be unsure whether your case may qualify for a ruling concerning the normal management of private wealth, you may always schedule a non-binding and free consultation with us.
Does the refusal of a tax ruling automatically mean that the income qualifies as miscellaneous income?
In practice, we observe that the Belgian Ruling Commission often adopts a particularly cautious and strict approach in crypto-related files. The conditions for obtaining a positive ruling confirming normal management of private assets are therefore relatively stringent in practice, and many investors do not fully meet all parameters applied within the ruling practice.
About Aeacus Lawyers
However, the absence of a positive ruling does not automatically mean that the gains concerned should be regarded as miscellaneous income.
The fact that the Belgian Ruling Commission is unwilling to issue a positive ruling does not automatically mean that the gains concerned should therefore be taxed as miscellaneous or professional income.
Aeacus Crypto Lawyers is the only law firm in Belgium fully dedicated to crypto assets, crypto taxation, and digital wealth. We assist clients from A to Z with all legal and tax aspects of crypto, ranging from tax advice, tax regularisations, and wealth structuring to tax audits, repatriation of crypto assets to bank accounts, litigation, advance tax rulings, and interactions with tax authorities or financial institutions.
For the sake of completeness, we would also like to point out that crypto-assets are increasingly attracting the attention of both tax authorities and financial institutions from a tax and financial perspective. Measures such as DAC8, the expansion of international data exchange between crypto platforms and tax administrations, increased scrutiny of transactions from crypto to bank accounts, and the introduction of the crypto capital gains tax mean that investors increasingly require advance tax certainty and proper documentation of their crypto activities.
We therefore generally recommend first submitting an anonymous prefiling request. Such a prefiling is informal and non-binding, but it does allow a first indication to be obtained in advance regarding the position of the Belgian Ruling Commission. If it becomes clear during this phase that there is little scope for a positive decision, it can still be decided not to submit a formal ruling request.