BELGIUM Law and Practice Contributed by: Alain Van Geel and Emilie Van Goidsenhoven, Tiberghien
Private Foundations See 3.1 Types of Trusts, Foundations or Similar Enti- ties . 2.7 Transfer of Assets: Digital Assets In Belgium, cryptocurrency accounts are considered as financial assets, such as cash. They are therefore subject to inheritance and gift tax in the same way as other movable assets. 3. Trusts, Foundations and Similar Entities 3.1 Types of Trusts, Foundations or Similar Entities The Belgian private foundation was introduced in 2002 and is now governed by the rules in the Belgian Code on Companies and Associations. Belgian private foundations are subject to legal entities tax; if they engage in commercial/economic activities in more than an accessory manner, a private founda - tion could be subject to corporate income tax. Being subject to tax on legal entities implies that only certain income categories will be subject to income tax, such as dividend and interest income (default rate of 30%). A private foundation pays a yearly tax on the total of its assets on 1 January, unless this total amounts to less than EUR25,000. Debts are not deductible (with certain exceptions, such as operational costs). This is a progressive tax, with the rate amounting to: • 0.15% between EUR50,000 and EUR250,000; • 0.30% between EUR250,000 and EUR500,000; and • 0.45% in excess of EUR500,000. However, various appeals for annulment against this revised tax have been filed with the Belgian Consti - tutional Court. Foreign private foundations are also recognised, but can be subject to the “Cayman tax” (see 3.3 Tax Con- siderations: Fiduciary or Beneficiary Designation ).
Reduced rates are available, subject to conditions (see 1.2 Exemptions ). For example, there is a special regime for family homes. 2.6 Transfer of Assets: Vehicle and Planning Mechanisms Belgian law allows for many different planning tech - niques and opportunities, including reduced rates for registered gifts, the possibilities under civil law (usu - fruct, indirect gifts, etc) and the existence of vehicles such as the private foundation or the so-called “ socié- té simple ”. Usufruct and Bare Ownership Ownership splits (usufruct/bare ownership) are fairly widespread in Belgium and make it possible to trans - fer assets to young children while retaining control. Usufruct is a legal right that allows someone to use and enjoy the benefits (such as income or resources) of a property that belongs to another person, without owning it. The person with the usufruct, called the usufructuary, can live in the property, rent it out or use it in other ways, but they cannot sell or damage it. Bare property, on the other hand, refers to the owner - ship of the property without the right to use or enjoy its benefits. The bare owner holds the title to the property but cannot exploit it until the usufruct period ends. Once the usufruct expires (eg, when the usufructuary dies or the term ends), the bare property owner gains full control of the property. Société Simple The société simple is often used when structuring an estate plan. It allows assets to be transferred (by a gift of the shares) while control of the assets is main - tained by others (usually the parents). The company’s shares may be donated in order to pass on the assets contributed to it. A société simple can be set up in several different situations, given the considerable freedom it offers to create a tailor-made arrangement. It does not require a notarial deed and can be done privately. In addition, the société simple is tax transparent.
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