BELGIUM Law and Practice Contributed by: Alain Van Geel and Emilie Van Goidsenhoven, Tiberghien
9. Trusts, Foundations and Related Entities 9.1 Choice of Planning Vehicle The Belgian private foundation was introduced in 2002 and is now governed by the rules in the Belgian Code on Companies and Associations. It is a legal entity without shareholders, established for a disinter - ested purpose, and is commonly used for asset pro- tection and structuring through multiple generations. While a private foundation does not distribute profits, it may hold and manage assets and make allocations in accordance with its statutory purpose. It is often used as an alternative to a trust in civil law planning, as this entity does not exist under Belgian law. Another vehicle frequently used for planning purposes in Belgium, and which is useful for managing family assets transferred to the next generation, is the so- called société simple . This entity is totally tax trans- parent and therefore has no tax impact. It is used to ensure maintenance of the management of the trans- ferred assets by the donors or trusted managers (as long as the beneficiary of the gift is still too young to manage the assets by themselves). 9.2 Recent Developments Affecting Planning Vehicles A private foundation pays a yearly tax on the total of its assets on January 1st, unless this total amounts to less than EUR50,000. Debts (besides certain excep- tions such as operational costs) are not deductible. This annual tax was reformed in 2024, with the rate being increased. This is now a progressive tax, the rate of which amounts to 0.15% between EUR50,000 and EUR250,000, to 0.30% between EUR250,000 and EUR500,000 and to 0.45% for amounts in excess of EUR500,000. Foreign private foundations are recognised as well but can be subject to the “Cayman tax” (see 10.2 Taxa- tion of Trusts ).
10. Fiduciary Regulation, Standards and Taxation 10.1 Corporate and Professional Fiduciaries There is no legal framework for private trust compa- nies in Belgium as the concept is unknown under Bel- gian law. Also, the use of corporate fiduciaries is not prevalent in Belgium. 10.2 Taxation of Trusts If a Belgian tax resident serves as a fiduciary or is a beneficiary of a foreign trust, foundation or similar entity, he or she may be subject to the Cayman tax. On 1 January 2015, the Cayman tax was introduced and was amended substantially as of 1 January 2018 and 1 January 2024. This is a look-through taxation on private individuals and legal entities (subject to the legal entities tax). Income received by a non- or low-taxed legal construct is taxable income for the founder. Trusts automatically qualify as a legal con- struct for the purposes of Cayman tax. With the look-through approach, the underlying income retains its original qualification, and no effec- tive distribution is required for taxation to occur. Inter- est received by the legal construct remains interest, dividends remain dividends and capital gains remain capital gains. The first two categories of income are generally taxed at a flat rate of 30% in Belgium. Capi- tal gains on moveable assets realised by individuals were generally tax-exempt to the extent that they were realised in the course of the normal management of one’s private assets. However, those capital gains are now taxed at 10% (since 1 January 2026). The look-through approach is combined with the taxa- tion of income received (or deemed to be received) from legal constructs. Complex rules aim to prevent double taxation of this combined approach, but due to the complexity, this aim is not always achieved. As of 1 January 2024, exemption of taxation upon dis- tribution by the legal construct will no longer apply in case the income received by the legal construct was not effectively taxed under the look-through taxation regime (ie, capital gains on shares). In addition, inter- posing an intermediary company (which is not a legal construct) will no longer prevent the application of the
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