What is the impact of the new capital gains tax on non-profit associations?

1. What is the capital gains tax?

As of 1 January 2026, a capital gains tax has been introduced in Belgium. It applies to individuals subject to personal income tax as well as legal entities subject to legal entities tax, such as most non-profit associations and foundations.

A capital gain arises when a financial asset is transferred for consideration (e.g. sale, exchange, …) at a price higher than its acquisition value. Only realised capital gains are taxed. In other words, the tax is only due upon an actual sale or exchange.

There are essentially three categories under the capital gains tax:

• Category A: the exceptional regime for internal capital gains, which provides for a tax rate of 33%.
• Category B: the special regime for capital gains realised on certain substantial shareholdings, i.e. holdings representing more than 20% of the rights in a company (substantial interest), which provides for a progressive tax rate ranging from 1.25% to 10%, with an exemption of EUR 1 million (over 5 years).
• Category C: the general regime (the residual category), which provides for a tax rate of 10%, a basic exemption of EUR 10,000 and a maximum exemption of EUR 15,000.

2. Are non-profit associations subject to the capital gains tax?

Yes, in principle.

The capital gains tax also applies to legal entities subject to legal entities tax. As a result, many non-profit associations and foundations fall within the scope of the regime. The remainder of this article focuses solely on non-profit associations, but the capital gains tax also applies to foundations.

There are also exceptions:

• Non-profit associations that are authorised to receive donations that qualify for a tax reduction are not subject to the capital gains tax. This concerns a limited list of institutions recognised by the Minister of Finance (or their representative). This list is published on the website of the FPS Finance. It is therefore not sufficient for the non-profit association to potentially qualify for this regime. The institution must be recognised by the Minister of Finance.
• Non-profit associations subject to corporate income tax are also not targeted by this regime, as capital gains are already taxed under the normal tax regime.

3. Which assets of a non-profit association are subject to the capital gains tax?

The capital gains tax applies to transfers for consideration of financial assets.

These may include shares in companies, as well as listed shares, bonds, ETFs, investment funds, derivatives, cryptocurrencies and investment gold. Savings insurance policies (such as Branch 21 or Branch 22 insurance policies) and investment insurance contracts (such as Branch 23 or Branch 44 insurance policies) also fall, in principle, within the scope of the tax.

Certain assets are not subject to the capital gains tax.

• Term accounts are not considered financial assets within the meaning of the legislation.
• Income from Branch 26 insurance policies is, in principle, also not taxable under the capital gains tax. The full return on these Branch 26 insurance policies is already taxed as investment income at a 30% withholding tax rate, meaning that it cannot be classified (again) as miscellaneous income under the capital gains tax.

For certain assets, such as shares in a company, it is important to determine which category the transfer falls under. Depending on the transaction and its percentage shareholding in the company (more or less than 20%), a non-profit association selling shares in a company may fall under one of the three categories (A, B or C) of the capital gains tax.

The transfer of other assets, such as investment funds, bonds or insurance contracts, falls solely under the residual category (C).

A thorough analysis of which assets are taxable (and under which category) is therefore always necessary.

4. Are historical capital gains also taxed?

No, in principle. To prevent increases in value from the past from being taxed, the law provides for a so-called "snapshot" on 31 December 2025. For financial assets already held before 1 January 2026, only the increase in value from 1 January 2026 onwards is taxed.

However, the historical acquisition value is only exempt if it can be demonstrated. It is therefore important for a non-profit association to be able to demonstrate and document the value of its financial assets on 31 December 2025. Proper accounting records, supported by the necessary documentation, are therefore extremely important.

5. Does the capital gains tax apply in addition to the annual tax on non-profit organisations?

Yes. The existing annual tax on non-profit organisations remains in place. The capital gains tax is a separate tax that may be due in addition to the annual tax on non-profit organisations.

6. What if the non-profit association acquired securities through a donation or inheritance?

For these assets, keeping all relevant documentation is even more important.

When certain assets are acquired through a donation or legacy, no capital gains tax is due at that time. This is because a donation or legacy is not a transfer for consideration. However, in the event of a subsequent sale or exchange (or another transfer for consideration), the value at which the donation or legacy was acquired will not be taken into account. There is therefore no step-up in the acquisition value.

7. Does a non-profit association have to file a tax return itself?

Yes. Unlike private investors, a non-profit association cannot have the tax automatically withheld by its bank (the so-called opt-in regime).

The non-profit association must identify the capital gains realised on these financial assets itself, calculate the taxable base, determine whether any exemptions apply, and subsequently file the relevant tax return and pay the tax due.

The withholding tax return must be filed and the withholding tax paid within 15 days after the end of the financial year via the withholding tax return. According to recent reports, however, an extension of this deadline is being considered to facilitate the practical implementation for non-profit associations.

Please note that this withholding tax filing obligation applies, in principle, only to capital gains on financial assets falling under category C (the residual category). No withholding tax is due on internal capital gains (category A) or capital gains on substantial interests (category B). These capital gains must instead be reported by the non-profit association in its legal entities tax return.

The tax authorities have already announced that they will address all these aspects in a new circular.

8. How can a non-profit association prepare?

Directors are advised to draw up a timely overview of all the association's financial assets and collect the necessary supporting documents. The following are particularly important:

• the value of securities portfolios and life insurance contracts on 31 December 2025;
• proof of purchase of financial assets;
• documents relating to the historical acquisition value of securities received through donations or legacies;
• annual statements of realised capital gains and losses provided by the bank.

For certain non-profit associations, it may also be advisable to consider whether applying for recognition by the FPS Finance to receive donations that qualify for a tax reduction would be beneficial.

9. Conclusion

The capital gains tax is not only relevant to private investors and entrepreneurs. Non-profit associations holding financial assets may also be affected by the new regime. For many associations, the main impact will be administrative. Proper documentation of the snapshot, the retention of historical data and timely filing are essential to avoid tax disputes.

Please do not hesitate to contact us if you have any questions or require assistance.