Anyone leaving Belgium will have to deal with the exit tax. This is not a separate tax, but a way in which the tax authorities tax the latent capital gains on your company or shares at the moment of departure. In practice, things often go wrong with the declaration, the valuation or the provision of security. Below I list the most common mistakes, with concrete tips to avoid them.
The biggest mistake is simply not knowing that the exit tax exists. Anyone who ceases to be a Belgian tax resident and holds shares or a company must in many cases file a declaration. If you don't, you risk tax increases and late payment interest. The tax authorities can issue an assessment ex officio, often based on an excessively high valuation.
A concrete example: an entrepreneur moves to France and thinks that his Belgian company simply continues to exist without tax consequences. Only years later, during an audit or a sale, it turns out that a protective assessment is outstanding. By then, the interest has already accumulated significantly.
What you should do: map out your tax position before you leave. Check whether you fall under the exit tax and seek advice in time. The basic rules can be found on our page about exit tax and protective assessment when emigrating.
The exit tax is calculated on the capital gain compared to the acquisition price. You must declare that capital gain yourself, and that's where the shoe pinches. Many emigrants use the book value or a symbolic amount, while the tax authorities demand the actual market value. A valuation that is too low leads to an additional assessment, a valuation that is too high leads to unnecessary tax.
The valuation depends on factors such as the sector, profitability, prospects and any debts. For an active company, one often looks at discounted cash flow or comparable transactions. For a property company, the value of the real estate prevails. Without objective substantiation, any discussion with the tax authorities is difficult.
My advice: have a valuation drawn up by a recognised expert before you emigrate. It costs money, but prevents much more expensive discussions afterwards. Also keep all documents that support the valuation.
The protective assessment is not an exemption. It is a deferral of payment as long as you do not sell the shares and you meet the conditions. Anyone who thinks that the assessment automatically disappears after five or ten years will be disappointed. The assessment remains in existence until a taxable event occurs, such as a sale, a dividend distribution above a certain threshold or a transfer of seat.
A classic mistake: someone emigrates, receives a protective assessment, and sells part of the shares three years later. He forgets that the sale makes the assessment partially payable. The tax authorities then send a payment request with interest. Anyone who does not count on that has a cash flow problem.
Read the conditions of your protective assessment thoroughly. If in doubt, ask the tax authorities for written confirmation. And plan ahead: if you want to sell within a few years, know what amount will be released.
For the protective assessment, you must in principle provide security, for example through a bank guarantee or a mortgage. Some emigrants try to avoid this or provide too little security. The tax authorities can then make the assessment immediately payable, and you lose the deferral.
The security must cover the principal amount plus part of the interest. The exact requirements depend on your personal situation and the amount of the assessment. Those who move to a country outside the EU often face stricter conditions.
Arrange the security before you leave. Banks are more reluctant once you are no longer a Belgian tax resident. A guarantee costs money, but is often cheaper than paying the assessment all at once.
The exit tax declaration must be filed within a certain period after your departure. Those who are late receive a tax increase. Those who are incomplete, for example by forgetting certain shares or receivables, risk an additional assessment with heavy interest.
The declaration is complex. You must not only declare the shares, but also any hybrid instruments, receivables from the company and other assets. A common mistake is forgetting a current account or a loan to the company.
Use a checklist and have the declaration reviewed by a specialist. The cost of an advisor does not outweigh the risks of an incorrect declaration.
The exit tax is a Belgian matter, but your new country of residence may also tax the same capital gain. Without a double tax treaty or good planning, you pay double. Some countries give a step-up in basis, others do not. Those who emigrate to Portugal, for example, must be careful about the interaction with the NHR regime.
A concrete example: you move to a country without a treaty with Belgium and later sell your shares there. Belgium collects the protective assessment, and your country of residence taxes the same capital gain. Without a possibility of offsetting, you are taxed twice.
Discuss your emigration plans with an advisor who knows both Belgian and foreign law. The order of the steps is crucial. More about the pitfalls when emigrating to Portugal can be found in our guide on common mistakes when emigrating to Portugal for tax purposes.
View our other guides or ask for no-obligation advice.
