Tax matters & legislation

Which data does MeDirect need to communicate to the Central Point of Contact (CPC) of the National Bank of Belgium?

Article 322§3 WIB inserted by the Act of April 14, 2011 containing various provisions (subsequently amended by the law of December 28, 2011 and March 29, 2012) obliges banks, savings and credit institutions operating in Belgium, to communicate on a yearly basis certain data of clients and some of their accounts/contracts to a Central Point of Contact, also known as “CPC”. The CPC is held by the National Bank of Belgium (NBB). The CPC will give tax officials in charge of the establishment and recovery of tax, the opportunity in certain cases and according to strict legal procedures to determine at which financial institutions taxpayers are holding accounts or contracts in order to request to these institutions further information in this regard. The following information about customers will be communicated to the CPC: 1) The national number (if not available: name, first name, date, place and country of birth) 2) A list of the accounts of which the client has been a (co-)holder at any time of the year to which the data relate. Since March 2015 we are also transmitting details on certain contracts to the CPC, such as wealth management contracts, that were already active in 2014. You have the right to examine your data registered by the CPC at the NBB. In the event that such information is inaccurate or wrongfully registered, you have the right to correct this information or to have it removed by the financial institution, which has communicated this information to the CPC. The data are stored for a maximum of 8 years by the CPC, starting from the last year in which information regarding the client and/or account was communicated. For more information you can find the full Royal decree by clicking here (French and Dutch only).

Tax declaration of the income from contractual investment funds

Income from foreign contractual investment funds (also known as FCP – Fonds Commun de Placement) are not taxed at source in Belgium, insofar they are not derived from movable income subject to the Belgian withholding tax. This is because these contractual investment funds do not have their own legal personality. Each unit holder is considered to have collected all movable income received by the fund himself in proportion to his holdings in the fund. This however does not apply to investment funds with a distinct legal personality, such as SICAVs. Each investor must in principle report income derived from such contractual funds in his annual personal income tax return. MeDirect recommends that you seek professional tax advice from a Tax advisor if you have any questions about the tax treatment of your investment.

Why does MeDirect have non-regulated savings accounts and why must I pay withholding tax on my interest?

The term “non-regulated account” can be confusing. All savings products offered in Belgium are subject to the supervision of the financial regulators (the National Bank of Belgium and the FSMA) and are in accordance with Belgian law. A regulated account means that the first €980 in interest on a savings account is exempt from withholding tax. The account must comply with certain rules for this, such as a loyalty bonus. Savings products that do not meet these requirements (such as fixed term deposits and other simple savings accounts with one clear interest rate) do not fall under the technical category of regulated accounts. They are subject to withholding tax. Non-regulated accounts are therefore completely legal and approved by the financial regulators. MeDirect chooses to offer non-regulated accounts because the clear and high interest rates (even after deduction of withholding tax) offer great advantages for our customers.

What is the stock exchange tax?

The stock exchange tax (TOB) is a Belgian tax due on transactions on so-called public funds, being securities who are eligible to be traded on a listed exchange. The Belgian stock exchange tax rate varies depending on the type of transaction (subscription, purchase/sale, redemption of shares of certain investment funds) and on the asset type (shares, bonds, etc.) and is applied on the value of the transaction, subject to maximum thresholds. You can check for each financial product how much the stock exchange tax will be. You will also find this amount on your order confirmation. MeDirect recommends that you seek professional tax advice from a Tax advisor if you have any questions about the tax treatment of your investment.

What is a W-8BEN Form?

The W-8BEN Form is issued by the US tax authorities (Internal Revenue Service (IRS)) and documents that an investor is a non-US person, thereby allowing the investor to benefit from a reduced rate of taxation (based on the double tax treaty signed with Belgium) on dividends and coupons paid by US companies. If you wish to invest in US securities, you will have to provide us with a signed W-8BEN Form. The W-8BEN Form is valid for three calendar years after the year in which it was signed. A new form must be submitted when the existing one expires, and MeDirect will inform you in advance of its expiration. MeDirect recommends that you seek professional tax advice from a Tax advisor if you have any questions about the tax treatment of your investment

Is the income I earn from savings and investment products subject to foreign taxes?

Interest income earned on savings accounts and fixed term deposits is in principle not subject to foreign taxes, insofar they beneficiary of these income is a Belgian tax resident. The same applies to revenues derived from investment products, insofar the issuer of this product is also a Belgian tax resident. Income from securities issued by foreign companies may be subject to source taxation in the country where the security was issued. However, a Belgian investor may benefit under certain conditions from a lower foreign tax rate or be entitled to a refund of foreign taxes by virtue of the double tax treaty between Belgium and the country where the issuer of the security is located. MeDirect recommends that you seek professional tax advice from a Tax advisor if you have any questions about the tax treatment of your investment

What type of income or capital gain is subject to withholding tax in Belgium?

MeDirect has an obligation to deduct Belgian withholding tax on: Interest income paid on current accounts, (regulated) savings accountsand fixed term deposits. Coupons paid on bonds issued by non-residents. Dividends paid on equities issued by non-residents as well as dividends from non-resident funds. Capital gains earned from certain transactions on share or units of investment funds that invest 10% or more in interest-generating securities (such as bonds). The withholding tax is applied on the “interest component” of realized capital gains. In such cases MeDirect will credit your income net of Belgian withholding tax due and remit the withholding tax to the Belgian tax authorities. This withholding tax is liberating, meaning that income previously subject to Belgian withholding tax must not be mentioned in your income tax return. MeDirect recommends that you seek professional tax advice from a Tax advisor if you have any questions about the tax treatment of your investment.

What is the annual securities accounts tax ?

On 17 February 2021, at the initiative of the Belgian government,a new annual tax on securities accounts held by individuals with Belgian and foreign financial institutions was passed (publication in the Belgian Official Gazette on 25 February 2021). This tax replaces the previous securities accounts tax, which was annulled by the Constitutional Court on 17 October 2019. This tax imposes a 0.15% levy when the average total value of securities on a securities account during a 12 month period, called a ‘reference period’, is higher than one million EUR. The average total value is calculated over this reference period, which runs in principle  from 1 October to 30 September. The average total value, takes into account the values of the securities on a given securities account on certain ‘reference points’, which are the quarter end dates (31 December, 31 March, 30 June and 30 September) and account opening/closing dates of the securities accounts (considering the day on which the tax entered into effect, the first reference period exceptionally started on 26 February 2021). This tax applies on all securities booked on a securities account, amongst other the following securities offered by MeDirect: Shares Bonds Trackers Mutual Funds