Belgium Crypto: FSMA Regulation & Tax #56

Country facts

Belgium crypto score

Trade and store crypto

FSMA oversight, 33% miscellaneous income rate, and professional trading classification

Belgium is keen to adopt blockchain technology, and its banking sector wants to harness the consumer demand for crypto trading and investment. One of its largest banking and insurance groups is also exploring a cryptocurrency for internal use and there is growing crypto retail acceptance.

There is no specific legislation on crypto investments in Belgium, leaving them to fall within the existing legal framework that applies to securities and investments. In other words, the existing framework that applies to financial investment products will largely apply to cryptocurrencies and related services within the crypto space.

Bitcoin trading & crypto law in Belgium

Legal – existing crypto legislation

Belgium recognizes bitcoin and other cryptocurrencies and, aside from the concerns that all governments have with regard to the prevention of money laundering, terrorism, and fraud, Belgium is ambivalent about the growth and development of digital currencies. The leading Belgium crypto exchanges that operate there are required to abide by the regulations that apply to the financial sector generally.

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Legal – forthcoming crypto legislation

Many regulations and directives are thrown up by the European Parliament with individual countries adapting and debating legislation on a national basis. At present, the Belgian Government’s more recent regulations on private individuals as well as businesses operating with cryptocurrencies are looking to achieve a stricter regulatory framework.

Bitcoin tax in Belgium

Your crypto trading is both recognized and tax allowable, so your expense as a professional incurred in buying or mining them – and your losses – can be offset. For non-professional crypto-dabblers, the relevant fact to consider – and declare – is whether your activity is a casual activity or a trading activity for income. The way you invest in Bitcoin will largely affect its qualification for income tax purposes. The special status of Bitcoin as a non-currency makes it not eligible for VAT.

Tax when moving residency

If you are a long-term resident of Belgium you are deemed a permanent resident for tax purposes. Should you move and become a resident, your tax affairs will come under the jurisdiction of your residence country.

Tax on mining

Mining is beyond the scope of most individuals and calls for significant investment in time, money, and equipment. However, if you declare yourself as a miner you are required to pay income on your profits but you may also deduct your expenses, such as electricity, maintenance fees, and the cost of your hardware.

Crypto financial services in Belgium

Fin services – retirement planning

Most retirement and pension funds worldwide deem cryptocurrencies to be too volatile to become part of long-term retirement schemes. There is little certainty on this at present.

Fin services – banking

KBC, one of the largest insurance and banking companies in Belgium announced a proposal to launch its own cryptocurrency as a form of reward token that would allow the bank to develop interaction strategies with its customers, promote its platform, and compel users to adopt its services.

Fin Services – Defi

Belgium has a progressive outlook on blockchain and many financial observers propound a financial system that operates without banks’ stranglehold – this may be wishful thinking, however.

Bitcoin in Belgium

Spend

There are many leading Belgium crypto exchanges operating and over 30 ATMs where you can buy and sell selected cryptocurrency using cash, but with some identity disclosure required. Many world brands operating in Belgium accept Bitcoin, among them Starbucks and Microsoft as well as home-based retailers, bars, and restaurants.

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Crypto regulation in Belgium

Security

As with any crypto dealings you are considering it’s always a good idea to check these levels of security, protection and insurance any exchange can offer you. Belgian-based exchanges may offer more recourse to action if things go wrong, and a more immediate level of customer support, whilst overseas-based exchanges can provide a wider choice of services and perhaps greater speeds of affiliation and transaction. In all cases, you’ll have to report your identity credentials and trading details.

Transparency

In line with most Government regulatory bodies, the Belgian authorities can request information from crypto exchanges and expect compliance with their laws. You’ll need to provide your personal details and proof of ID – so you can forget about the myth of anonymity that surrounds cryptocurrency.