Belgium: The Belgian Constitutional Court decides on the annual tax on securities accounts (ATSA)

On Thursday the 27th of October 2022, the Belgian Constitutional Court has delivered its long-awaited judgment on the constitutionality of the annual tax on securities accounts introduced by the Act of February 17, 2021 (hereafter “ATSA”).

As a reminder, the ATSA is applicable, in principle, on all securities accounts held in Belgium if the average value in the reference period (01/10/20XX – 30/09/20XX) exceeds 1 million EUR. The tax rate is 0,15% and calculated on the average value held on the securities account.

Already from the start, several objections could be raised concerning certain constitutional principles, for example regarding the principle of equal treatment (non-discrimination), the tax legality principle, the prohibition of double taxation (ne bis in idem principle) and certain aspects of European law. 

A total of 7 separate annulment appeals were filed, causing a broad group of taxpayers to await with interest the outcome of the procedure before the Court. 

Although there was hope for several fundamental corrections to or even the full annulment of the ATSA, the Court apparently sees far fewer problems regarding the ATSA. 

The Court decides to annul the specific anti-abuse provisions regarding the splitting of a securities account into several securities accounts held with the same financial intermediary and the anti-abuse provision regarding the conversion of financial instruments held in a securities account into registered financial instruments (not held on a securities account). 

In addition, the Court ruled that the retroactive effect of the general anti-abuse provision regarding the period prior to the entry into force of the law, i.e. from 30 October 2020 to 26 February 2021, was not permissible and should therefore be annulled. 

Action can therefore be taken regarding any application of the specific or general anti-abuse measures prior to the 26th of February 2021. Any application of any anti-abuse measure before this date (the date of entry into force of the law) is invalid and can therefore be contested in a straightforward manner. In principle, this has to lead to a full reimbursement of the ATSA that was paid as a consequence of the application of said anti-abuse measures.

Any application of the specific anti-abuse measures as from the 26th of February 2021 can also be targeted, however, taken into account that the general anti-abuse measure still applies. 

This means that if any wealth were to be transferred to a second securities account held by the same financial intermediary this cannot be considered to be tax abuse, unless the tax administrations proves this to be the case. In the presence of sufficient non-tax related arguments, therefore, the reimbursement of the ATSA can be requested.

If financial instruments held on a securities account were to be converted from 26th of February 2021 or any later date in a registered form, there will be no ATSA applicable if the taxpayer has sufficient non-tax related arguments to substantiate the non-application or even reimbursement of the ATSA.

For the remainder, the ATSA has survived all legal discussions meaning the ATSA should still be declared and paid for the 2022 reference period (01/10/2021 – 30/09/2022) and any further reference periods.

If you wish to discuss this topic, please contact: Tiberghien, Antwerp

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