The tax on securities accounts (TSA) was adopted back in February 2018. As a reminder, the TSA is a tax levied at a rate of 0.15% on the total value of in-scope securities held by Belgian individual tax residents on securities accounts with Belgian or foreign banks; or held by foreign individuals on securities accounts maintained with Belgian banks. To the extent that the average annual value of such securities exceeds € 500,000 per account holder, the TSA would be due.
In a case that was decided earlier today, our Constitutional Court has concluded that this tax is in violation of the principle of equality and non-discrimination. The result is, most likely, that this tax will be abolished, but only for the future.
As soon as the TSA was introduced with the Law of 7 February 2018, several disgruntled taxpayers filed a request with the Constitutional Court, which all have been settled in the same decision of today, 17 October 2019 (Case Nr. 138/2019). Different arguments have been raised, but on several accounts the Court concluded that the TSA is in violation of the general principle of equality and non-discrimination.
This principle does not exclude the introduction of a difference in treatment between categories of taxpayers, but only to the extent that this difference is based on an objective criterion and is reasonably justified. The Court argued that there is no reasonable justification for the difference in treatment that is, for example, created between private individuals depending on whether the financial instruments at their disposal are registered in a securities account or not.
Furthermore, the Court also criticises the presumption that the share the different beneficiaries have in a securities account would be proportional based on the number of beneficiaries to that account and not on their actual share in it. This allows certain investors to escape the TSA (by spreading their investments over several beneficiaries), while private individuals who do hold their securities accounts in full, are immediately affected by the TSA. Again, this is a difference in treatment for which no reasonable justification could be found.
As a result of today’s decision, the TSA will most likely only be abolished for the future, as it would otherwise have an unwanted budgetary impact. Since the TSA works with certain reference periods, it will presumably no longer be due for any tax assessed after 30 September 2020.
For the reference periods that have already been closed (the most recent one just recently on 30 September 2019, for which the tax bill is currently being received by many investors), the TSA remains due (at least on the basis of this judgement). And there is little hope that the Belgian Treasury will spontaneously refund the 0.15% tax that has been previously settled…