Bitcoin and cryptocurrency trading in Belgium
Belgium is keen to adopt blockchain technology and its banking sector wants to harness the consumer demand from 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.
Law and crypto trading in BelgiumLegal - existing crypto legislation
Belgium recognises bitcoin and other cryptocurrencies and, aside from the concerns that all governments have with regards to the prevention of money laundering, terrorism and fraud, Belgium is ambivalent about the growth and development of digital currencies. The leading crypto exchanges that operate there are required to abide by the regulations that apply to the financial sector generally.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.
Taxing cryptocurrencies in Belgium
If you trade cryptocurrencies in any capacity you’ll be eligible for income tax on your profits or gains. As is the norm in Europe, taxes on cryptocurrency gains are not small – and there are strict regulations about how you transact and with whom you do it. According to the Special Tax Inspectorate (STI) in Belgium gains on crypto trading are classified as miscellaneous income and subject to income tax of 33%. Capital gains are exempt from tax when derived from the management of private estate, but taxable at 33% when gained from business or speculative activities such as crypto trading.
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 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
Most retirement and pension funds worldwide deem crypto currencies to be too volatile to become part of long-term retirement schemes. There is little certainty on this at present.
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.
Belgium has a progressive outlook on blockchain and many financial observers propound a financial system that operates without the stranglehold of banks – this may be wishful thinking, however.
Using crypto in Belgium
There are many leading exchanges operating in Belgium 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 home-based retailers, bars, and restaurants.
You won’t be able to reduce your tax by gifting your cryptocurrency. Whatever gain you have made on it will be taxable up to the point at which you gift it whether to an individual, friend etc, or a recognised charitable organisation. Some exchanges – and plenty of tax specialists – can offer advice on gifting your crypto currency.
Crypto regulation in Belgium
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.
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.