Many people are still unaware of it, but Belgium is one of the rare countries where a capital gain made with the purchase or resale of a cryptocurrency is not necessarily taxed. Through certain of his actions, however, the saver can quickly transition to the status of trader without realizing it…
Belgium is one of the only countries in Europe not yet to systematically tax capital gains made on the resale of a cryptocurrency. However, many savers are still unaware of this: it is essential to declare your income in your tax return.
Respect the 3 criteria of a good father
To avoid taxation, the saver must fit into the profile of a good father. “He is the one who invested prudently” explains Baptistin Alaime, tax lawyer at Tuerlinckx Tax Lawyers, a Belgian company which specializes in supporting investors in cryptocurrencies.
There is no perfect definition of a “good father”. However, “we consider that a good father meets these three criteria” : the duration of holding an asset before resale must be greater than 6 months – the good father therefore does not trade on a day-to-day basis -, the importance of the assets invested in cryptocurrencies must be “limited” – we consider that 20% of the total fortune is “correct”, even if in the law, there is no consensus. And then, the number of operations carried out is important. This is on a case by case basis.
That is, if you bought Bitcoin two years ago and sell it today, you won’t be taxed at all. On the other hand, if you have bought and resold the same asset in recent months, you risk being considered a trader and being taxed at 33%. So of course, there are a whole bunch of small exceptions that can justify this action.
Avoid DeFi
According to Baptistin Alaime, what is certain is that certain actions will put you directly in the “taxable” box. In particular, everything related to passive income.
Concretely, we are talking here:
- airdrops, these “donations” in cryptocurrencies made to members of the community
- staking, these long-term savings of assets which are rewarded by donations
- of DeFi – or decentralized finance, concretely, a system which allows you to lend your assets to other users and be reimbursed with very advantageous rates
- cryptocurrency mining
- Liquidity mining, a form of liquidity lending for decentralized exchanges that also rewards lenders
If you want to avoid 33% taxation, it is better to avoid playing with fire by testing these options. For the Tuerlinckx firm, there is de facto a risk that the tax administration will consider only one profile per person, not two. A person who has only tried staking for a week therefore risks being considered a trader for all his investments, even if he had behaved like an excellent father…
