Tax on custody accounts: FAQ

Tax on custody accounts: FAQ

On 17 October 2019, the Constitutional Court declared the Act on the tax on custody accounts unconstitutional and annulled it. The consequences of the Act continue to exist for all reference periods that ended no later than 30 September 2019. For reference periods ending on or after 1 October 2019, the tax is no longer applicable.

You will undoubtedly be aware that the government decided in the summer of 2017 to introduce a tax on custody accounts from 2018. You will find a number of frequently asked questions and answers concerning this new legislation here.

If you have any questions, your KBC team will be happy to assist you.

Do I still have to pay the tax now that the Constitutional Court has annulled the Act?

On 17 October 2019, the Constitutional Court declared the Act on the tax on custody accounts unconstitutional and annulled it.

For reference periods ending on or after 1 October 2019, the tax is no longer applicable. However, it continues to apply for all reference periods that ended no later than 30 September 2019.

For these reference periods, KBC has provided its customers with an overview. For those customers whose calculated average value of their custody accounts together reaches the threshold of 500 000 euros, the tax will also actually be withheld.

For reference periods ending on or after 1 October 2019, however, the tax will no longer be applicable. Therefore, KBC will stop providing its customers with an overview.

The Court has ruled that for the periods for which the tax was still due, the government does not have to refund this tax.
In the past, KBC has taken several measures to recover any tax paid in the event of the annulment of the Act.

This will be dealt with further by the judicial authorities. KBC is also looking into whether it needs to take additional measures to safeguard the rights of its customers in this regard. We will keep you informed of further developments.

Who is affected by this tax?

Both natural persons qualifying as Belgian inhabitants (and liable to personal income tax) and non-inhabitants who are natural persons are liable to the tax, regardless of whether they operate their custody account indirectly through a partnership, have a direct entitlement or hold it directly in their name.

For Belgian inhabitants who are natural persons, this applies to all accounts whether they're held in Belgium or abroad while, for non-Belgian inhabitants, it only applies to custody accounts held in Belgium.

The tax authorities confirm that non-residents able to claim the benefit of a double taxation treaty whose ambit extends to ‘wealth tax’ escape liability to the tax. KBC will itself look at holders' tax residence and determine whether they qualify for exemption. Swiss residents only require to provide their intermediary with a certificate of residence, a model of which is available from your KBC team.

Legal entities (trading entities, non-profit organisations, foundations, etc.) are outside the scope of the tax. However, there is an anti-abuse rule allowing the tax office to disregard the contribution on or after 1 January 2018 of a custody account to a legal person subject to corporation tax where the principal motive for the transfer is the avoidance of tax. As a result, the natural person who contributed their custody account will be considered the direct holder of that account.

To which securities does this tax apply?

It applies to 5 categories of financial instruments, irrespective of the income they generate.

  • Shares (listed and unlisted) and certificates of those financial instruments
  • Bonds (listed and unlisted) and certificates of those financial instruments
  • Units and shares in funds (CIFs and open-ended investment companies/Beveks) with the exception of funds acquired in the context of pension savings or life insurance
  • Savings certificates
  • Warrants

Registered shares listed in the issuer’s name in the register are not subject to tax, contrary to the registered shares in a custody account.

To prevent certain taxpayers from using that as a loophole, an anti-abuse provision was included concerning the conversion of registered shares after 9 December 2017. This stipulates that shares converted into registered shares after this date, will be subject to the tax during the first ‘reference period'.

To make it less appealing to these same individuals, it has also been stipulated that they must declare the converted shares themselves.

Certain financial instruments and contracts are exempt from the tax: i.e., options, guaranteed-interest (class 21) and unit-linked (class 23) insurance contracts, swaps, futures, etc.

Information important to understanding the tax calculation method

In order to understand how legislature intends to apply the tax on custody accounts, it is important to define the following terms.

Reference period

This is generally the 12-month period that runs from 1 October to 30 September. Other exceptional reference periods are possible, for example, when a custody account is closed or when a holder is removed from an account. During this period, your custody accounts will be assessed to see whether you have to pay this tax. This period consists of various reference moments.

Reference moments

Points in time at which your custody account is assessed. This assessment contains information that needs to be included on a statement. There are generally four reference moments (and, consequently, four statements) to a reference period. There can be other, exceptional reference moments, for example, to remove a holder, to establish a pledge or usufruct on a custody account, or to open or close a custody account.


At the end of the reference period, the average value of the statements is calculated and your bank sends you an overview stating the average value and the tax paid or to be paid.

When is the tax payable?

The tax applies when the average value of the financial instruments concerned is 500 000 euros or more per entitled party. The basic rule is that the calculation of the average value must be based on a 12-month reference period. Please note that, in addition to the basic rule, exceptional shorter reference periods may apply.

The calculation of the average valuation is based on the assessment of the custody account made at four statutory reference moments. For example, the custody account is assessed on 31 December, 31 March, 30 June and 30 September.

The assessment is made based on the closing price known at the time of the assessment (stock-market listed products). Otherwise, consideration is successively given to the MiFID valuation, the latest publicly available market value and a best efforts valuation.

Special rules apply to ‘changes’ that result in a ‘shorter’ reference period. The following constitute a change:

  • Opening a custody account
  • Closing a custody account
  • Adding an account holder
  • Removing an account holder

These changes will result in an early reference moment. Grants of liens or rights of usufruct can result in an interim snapshot. 

Considering these aspects, the following calculation is made to check whether the threshold of 500 000 euros has been reached:

1. The values calculated at the various reference moments are added together and then divided by the number of reference moments (per custody account).

2. The average values of all custody accounts with a reference period that ends on the same date are added together.
If, for an investor, the threshold of 500 000 euros is reached during a reference period, the tax rate of 0.15% is payable on the entire amount and not only on the portion exceeding the threshold.

The tax is payable on the total value of a taxpayer’s custody accounts held at various financial institutions. In order to enable the administration to check this, the taxpayer will have to report the existence of multiple custody accounts in their personal income tax return form from now on.

Who is considered the holder of a custody account?

The natural person who holds the custody account or who is registered or identified as the holder of the custody account, is deemed to be the holder of the custody account:

  • Regardless of whether that person is registered as the full owner, owner of the bare property rights or usufructuary
  • Irrespective of their prenuptial agreement (for married taxpayers)

This has different consequences:

1. No proxy holder will be regarded as the holder of the custody account (which is the subject of the mandate), and will therefore not have to pay this tax.

2. If one custody account has multiple holders, the rule of equal distribution will be applied, in compliance with statutory requirements, to the various holders (natural persons) as if the legal entity holders do not exist. This may not necessarily concur with the legal reality, given that the holders may have contractually agreed upon a distribution in terms of percentage.

A holder who, as a result of this equal distribution, has paid too much tax, can request restitution from the tax authority, accompanied by the necessary documentary evidence. A new calculation will be made for the joint holder. There is nevertheless a several liability for the payment of the tax.


A man and woman are joint holders of a custody account with an average value of 1.200.000 euros. The tax will automatically be deducted, because it is assumed that both the man and the woman retain an average value of 600.000 euros on their custody account. Consequently, a total of 1.800 euros in tax will be deducted from the two together.

However, their prenuptial agreement indicates a distribution of 70-30. The woman therefore has only an average value of 360.000 euros and, as a result, she can request restitution of the whole amount paid by her in tax. The man, on the other hand, now has an average value of 840 000 euros and therefore owes 1.260 euros in tax. He has already paid 900 euros, and now must pay an extra 360 euros in tax.

3. The calculation becomes more complicated in the case of divisions of usufruct – bare ownership.


a custody account is held in usufruct – bare ownership by three persons (usufructuary and two bare owners). The average value is 1.200.000 euros.

Unless the opt-in is applied (where the account holder requests that the tax be deducted, even though they remain below the threshold of 500.000 euros), no tax will be deducted (the value will be divided by three).

When the usufructuary reaches the age of 95, the conversion coefficient will be 2.4% (as a result of the MB of 1 July 2017). Their share will therefore be valued at 29.640 euros (and no tax is payable on the custody account). While at the same time, the shares of the two owners of the bare property rights will be 585.180 euros each.

Note: as a rule, at KBC and CBC the bare owners are registered as the sole holders of the custody account in the event of a division. The value of the custody account in the above example is then divided in two and 900 euros of tax is then automatically retained from each of them, though the tax office can be applied to for a refund.

Who is liable to pay this tax?

In most cases, professional intermediaries based in Belgium (in practice, this will generally be banks, listed companies and all other financial institutions) will have to accept liability for the tax.

Specifically, this means identifying the accounts and customers involved, valuation of the financial instruments, providing the customers with relevant updates and, where applicable, calculating and deducting the tax and paying it anonymously to the tax or other competent authority.

So, that same intermediary with whom you hold your custody account(s) must inform you of the average value of such custody account(s) at the end of each reference period.

Subsequently, there are 2 possible scenarios:

  • If the value of your custody account(s) reaches the threshold of 500.000 euros at the end of a reference period, the professional intermediary is required to deduct the tax directly at source. It concerns a discharge by payment: you no longer need to include that amount in your tax return for the tax on custody accounts.
  • If the value of your custody account(s) with this intermediary do not reach the threshold of 500.000 euros, you can request that the professional intermediary deduct the tax anyway, with the discharge character through an ‘opt-in’. The intermediary is required to offer this option to every holder of a custody account. The account holder must then determine whether the value of all their custody accounts amounts to 500.000 euros.

As an exception, in some cases, the holder is liable for the tax, in which case they will have to submit a tax return. This applies in particular to custody accounts abroad, and also when the holder has declined to opt for the discharge by payment, in the event that they have reached the threshold of 500.000 euros for all of their custody accounts during the reference period.

Intermediaries based abroad will be given the opportunity to calculate and pay the tax on their clients’ behalf. Holders of foreign custody accounts will therefore have to check with their intermediaries abroad whether the tax will be imposed and/or they are providing the necessary information for that purpose.

Submitted a return late or not at all attracts a fine of 10% to 200%, with the possible addition of default interest.

In brief, with time line

Short summary of what will happen:

1. Valuation of custody accounts and drafting of ‘statements’ at the reference moments by your Belgian or foreign financial intermediary (or you personally)

2. Adding up the valuations (based on the statements) and calculating an average per custody account. As at 30 September in the case of a standard reference period or when there is a specific change affecting the custody account (rump reference period). This will enable you to determine whether your custody account has an average value of ≥ 500.000 euros

3. Globalisation of the accounts of the same holder at the end of each reference period.

For example, it is possible to determine whether all the custody accounts you have at a single financial institution have an average total value of ≥ 500.000 euros.

4. Submission of the overview to the account holder, including the amount of tax to be deducted, at the end of the first month following the end of the reference period.

5. Possibility for the holder to request the intermediary to deduct the tax anyway if the average value of the custody accounts with this intermediary < 500.000 euros

6. Opt-in no later than the end of the second month following the end of the reference period
Submission of return to appropriate authority and discharge by payment of the tax by the financial intermediary (in principle no later than the 20th day of the third month following the end of the reference period)

7. Specific returns at the time the PB return is submitted by the holder and, if necessary, a request for restitution or payment of extra tax through a separate tax return for custody accounts.


This page contains no legal or tax advice, is without obligation and is purely for information purposes. The examples are indicative. Published on 30 September 2019.

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