BELGIUM Trends and Developments Contributed by: An Weyn and Aurore Sultus, Arteo Law
Summary of Applicable Inheritance and Gift Tax Provisions Inheritance and gift tax is a regional tax, so tax rates, tax assets and tax-free amounts differ according to the region concerned. In Belgium, there are three regions: the Flemish Region, the Walloon Region and the Brussels Metropolitan Region. Inheritance tax – no general spousal exemption In the Flemish Region, the rates applicable between spouses, cohabitants and in direct line start at 3% and rise to 27%. In the Brussels Metropolitan and Walloon Regions, these rates currently vary between 3% and 30% in direct line. At the Walloon level, the regional government has decided to reduce the inheritance tax rates by 50%, which will result in a maximum rate of 15% in direct line; however, the date of entry into force of these significantly lower inheritance tax rates has recently been postponed until further notice. Gift tax – claw-back period of five years for non- registered gifts Belgium’s gift tax rates are considerably lower than its inheritance tax rates, with gift tax rates in direct line going from 3% to 3.3%, depending on the region in which the donor lives. From a Belgian tax perspective, gift tax is a registra - tion tax under Belgian law. The registration procedure – triggering gift taxes – is compulsory for: • gift deeds passed before Belgian notaries; and • gift deeds passed before foreign notaries if the donor is a Belgian resident on the date the gift occurs. If the gift can be formalised without requiring a notarial deed, then no gift tax is due. However, if a donor dies in the five years following such a non-registered gift, inheritance taxes will be due, taking into account the value of the gifted assets. Favourable rules applicable to family businesses and shares of family-controlled companies Transferring a family business or a family-controlled company, whether by inheritance or by gift, involves
the application of inheritance or gift taxes. To help family businesses continue operating across genera - tions, the regional governments have provided more favourable tax regimes that significantly reduce these taxes, provided the company carries out a genuine economic activity. Since 1 January 2026, new rules apply to the inher - itance or gift of family businesses in the Flemish Region. The most important change concerns resi - dential real estate: real estate that is primarily intended for residential use is no longer subject to the favour - able regime, and neither is building land held by the family business. Recent Developments in the Area of “Cayman Tax” Belgium’s “Cayman tax” is a transparency rule that treats income from foreign trusts, foundations and low-taxed entities as if it were earned directly by the Belgian resident who settled or founded them, or who directly or indirectly holds an interest in the entity. The income of the relevant targeted constructions thus becomes taxable in the hands of the Belgian resident founders as if they had received it directly, even if the income is not actually distributed to the founder. In addition, all distributions made by the construction to its Belgian resident founders are considered taxable as dividend income unless the beneficiary can prove that the distributed income has already been “taxed in Belgium” or that the distribution relates to capital initially contributed by the founder. Moreover, upon the emigration of the founder abroad, the undistributed income of the construction is deemed to be distributed by way of a dividend. As a result, the founder will be taxed on a fictitious dividend income upon relocation. The rules in the area of Cayman tax have only strengthened since their introduction in 2015. How - ever, the most recent reform – adopted by the Law of 22 December 2023 – has been partially annulled by the Belgian Constitutional Court in its judgment of 18 September 2025. Some important takeaways of the judgment are summarised below.
114 CHAMBERS.COM
Powered by FlippingBook