Contrary to popular belief, gold owners are also victims of our Arizona government's new ‘Law introducing a capital gains tax’. Gold was not yet mentioned in the first draft texts, but was added to it under certain political pressure.
Which gold is taxed?
In the legal text, the legislator distinguishes 4 different categories with which they define the term ‘financial assets subject to capital gains tax’. It concerns financial instruments, insurance contracts, crypto assets and currencies. Investment gold is also placed under the currency category. Investment gold is a term defined in European Directive 2006/112 / EC Article 344 (1) (2).
In practice, this concerns gold in the form of bars or plates of more than 1 gram and with a purity of at least 99.5%. Gold coins with a purity of at least 90% that were minted after 1800 and that act or have served as legal tender in the country of origin are also considered investment gold. In short, this concerns all current gold bars of more than 1 gram, but also all 1oz coins such as the Krugerrand, Maple Leaf, Philharmonic, Eagle, Kangaroo, etc. Coins with a lower weight such as the Sovereign, Vreneli, Napoleon, Louis, Dutch guilder, etc. are also investment gold.
Even though a VAT exemption applies to investment gold, apparently the separate status of this category does not apply to capital gains tax. Jewellery, though, is left out of range because it is not considered investment gold.
When will you be taxed?
It goes without saying that you are only taxed when an added value is realized. As long as you do not sell, no capital gains tax is due. The price of December 31 of this year will be used as a reference to levy the tax. Historical added values are therefore not taxable.
Anyone who sells from next year will have to pay a tax of 10% on the added value on all profits above €10,000. For the rest, of course, all modalities apply with regard to exemptions as apply to other financial assets.
How are you taxed?
The general principle is that the Belgian financial institution (bank or broker) collects the tax on the sale and then transfers it to the tax authorities. The advantage of this is that you no longer have to declare added value in your tax return. The disadvantage, however, is that you have to 'pre-finance' the amount of the exemption because you only get it refunded from the tax authorities after 1.5 to 2 years.
Those who do not want that can opt for an opt-out. Then the (Belgian) financial intermediary will not withhold the tax, but then you must indicate the added value yourself in your tax return. The bank or broker will provide a tax certificate of your transactions to the tax authorities so that it is not an option to "forget your added value." Added value that is realized at foreign banks or brokers automatically falls under the opt-out method. The Belgian tax authorities cannot oblige them to withhold the capital gains tax. Nor will a tax certificate be drawn up. So you are supposed to indicate everything correctly.
Physical gold (and crypto) are by definition covered by the opt-out method. With what we now know, it is not the intention that Belgian gold traders will retain the added value in sales. You must therefore indicate this yourself. It is not clear for the time being whether the gold trade will have to draw up a tax certificate. Nor is there any knowledge about the tax treatment of other physical precious metals such as silver, platinum and palladium. We will come back to this when this is the case.
Text: Koen Lauwers
