Inheritance tax in Belgium
In Belgium inheritance tax is levied on an acquisition due to death and gift tax is levied on a gratuitous gift between living people. The taxes are levied in accordance with the laws of the Flemish Region , the Walloon Region and the Brussels-Capital Region .
Transition from a state tax to a regional tax
Originally, inheritance and gift tax in Belgium was levied uniformly for the entire national territory on the basis of the Inheritance Tax Act of May 4, 1936 ( Wetboek der Successiererechte ). By law of January 16, 1989, inheritance tax was declared a regional tax for which the regions were responsible for setting tax rates and exemptions. In 1997 the Flemish Region and later also the Walloon Region and the Brussels Capital Region made use of the competence granted to them for their own organization. Since then, inheritance and gift taxes have been regulated differently in the three regions.
Intra-regional jurisdiction
The region in which the deceased was domiciled during the five years prior to his death is responsible for inheritance tax. If he lived in several regions during this time, the inheritance tax law of the region in which he spent most of it applies. The same rule applies to gift tax in relation to the donor's place of residence. In addition, the regions levy inheritance or gift tax as an estate tax for the properties in their area if the testator or donor does not have a domestic residence.
Personal and material tax liability
Inheritance and gift tax are unrestrictedly subject to people who are domiciled or permanently resident in Belgium. This also extends to the foreign assets of a testator. Residents outside Belgium are subject to limited inheritance tax liability only in relation to their immovable property located in Belgium (such as land, condominiums), but not to their movable property there. The tax is levied as an estate tax, which is why encumbrances on the property are not deducted when determining the tax base. Special rules apply to employees of international authorities such as NATO or the EU , who are generally exempt from paying Belgian tax, including inheritance tax.
Estate value
Gifts made by the testator to an heir within three years before his death are also added to the estate, unless gift tax has been paid separately for them beforehand. In principle, the market value is decisive, there are privileges for heirs in tax class 1 (see below). The objects of the estate are valued at their market value. Within tax class 1, there are discounts for land by taking the cadastral value into account.
Procedure
The inheritance tax return must be submitted by every heir resident in Belgium within five months, in other European countries within six months and in other countries within seven months.
Flemish Region inheritance tax
Determination of the estate
In the case of an estate, a distinction is made between immovable (such as real estate) and movable objects. Their values are determined separately. The tax rate is set separately for each asset group. Liabilities, including estate costs, are first deducted from movable property.
Tax classes and tax rates
The acquirers are divided into three inheritance tax brackets.
- Tax class 1: Relatives in the ascending and descending line (parents, grandparents, children, grandchildren), spouse and legally or actually cohabiting persons; Statutory cohabitants are those who have this fact officially registered; Actually cohabiting people are those who lived alone or with several people with the testator for more than a year before his death; siblings can also live together
- Tax class 2: siblings
- Tax class 3: all other relatives and strangers
The tax rates increase progressively within the tax brackets as shown in the table below.
| Inheritance | Tax class 1 children, spouse |
Tax class 2 siblings |
Tax class 3 others |
|---|---|---|---|
| up to € 50,000 | 3% | 30% | 45% |
| € 50,000 - € 75,000 | 9% | 30% | 45% |
| € 75,000 - € 125,000 | 9% | 55% | 55% |
| € 125,000 - € 250,000 | 9% | 65% | 65% |
| over € 250,000 | 27% | 65% | 65% |
Allowances
Exemptions are granted in a complicated procedure for tax class 1 for the first € 50,000, and correspondingly with lower amounts for tax classes 2 and 3. There are additional tax exemptions for children until they reach the age of majority.
Company equity transfers
Shareholdings in family businesses or assets of such companies that are based within a member state of the EU are exempt from inheritance tax if the testator's share was at least 50% and the company employs at least five people in Flanders during the three years prior to the inheritance and this will be maintained for the next three years. In a judgment of October 25, 2007, the European Court of Justice objected to this rule insofar as the exemption requires workers to be employed in Flanders.
Inheritance tax Walloon Region
Determination of the estate
When calculating the estate, unlike in the Flemish region, no distinction is made between movable and immovable property, nor is there a separate application of the tax rate.
Tax classes and tax rates
The Walloon inheritance tax law is still linked to the earlier division of federal inheritance tax and is based on four tax classes.
- Tax class 1: Relatives in ascending and descending line (parents, grandparents, children, grandchildren), spouses and legally cohabiting people, these are those who have had their cohabitation officially registered, which siblings can also do; actual living together is not enough
- Tax class 2: siblings
- Tax class 3: uncles, aunts, nieces and nephews
- Tax class 4: all other people
The tax rates grow progressively within the tax brackets as shown in the table below.
| Inheritance | Tax class 1 children, spouse |
Owner- occupied apartment, children, spouse |
Tax class 2 siblings |
Tax class 3 uncles, aunts |
Tax class 4 others |
|---|---|---|---|---|---|
| up to € 12,500 | 3% | 1 % | 20% | 25% | 30% |
| € 12,500 - € 25,000 | 4% | 1 % | 25% | 30% | 35% |
| € 25,000 - € 50,000 | 5% | 2% | 35% | 40% | 60% |
| € 50,000 - € 75,000 | 7% | 5% | 35% | 40% | 60% |
| € 75,000 - € 100,000 | 7% | 5% | 50% | 55% | 80% |
| € 100,000 - € 150,000 | 10% | 5% | 50% | 55% | 80% |
| 150,000 - 175,000 € | 14% | 5% | 50% | 55% | 80% |
| 175,000 - 200,000 € | 14% | 12% | 65% | 70% | 80% |
| € 200,000 - € 250,000 | 18% | 12% | 65% | 70% | 80% |
| € 250,000 - € 500,000 | 24% | 24% | 65% | 70% | 80% |
| over 500,000 € | 30% | 30% | 65% | 70% | 80% |
The law provides for a tax rate of 90% for tax class 4 (other) from an amount of more than 175,000 euros, but this has been declared ineffective by the constitutional court.
In tax class 1, the purchase of an apartment in the Walloon Region shared by the deceased with the heir is tax-privileged if it was used by the deceased at least five years before the death of the deceased or is no longer used by him for special reasons could be. This concession can be found in the Walloon Region inheritance tax table under owner-occupied housing .
Allowances
In tax class 1, an allowance of 25,000 euros is granted, which is then doubled if the inheritance does not exceed 125,000 euros in value. In the other tax brackets, the tax exemption is EUR 620. For children of the deceased in tax class 1, the tax exemption increases by 2,500 euros for each year that the child still separates from the 21st year of life. In this case, the surviving spouse or legally cohabiting partner receives half of this additional allowance. If the heir or legatee in tax classes 1 and 2 has at least three children who have not yet reached the age of 21, the tax burden is reduced by 2% per child, but not by more than 62 euros per child. In this case, inheriting spouses or legally cohabiting persons receive a tax reduction of 4% per child, but not more than 124 euros per child.
Transfer of company shares
When family businesses are transferred, an inheritance tax of 3% is levied, with conditions similar to those in the Brussels region (see below).
Inheritance tax Brussels-Capital Region
Determination of the estate
When determining the estate, no distinction is made between movable and immovable property, nor is there any separate application of the tax rate. In tax classes 3 and 4 (from relatives of the side line and third parties, see below), the subject of taxation is the entire estate prior to its distribution among several heirs.
Tax classes and tax rates
The inheritance tax law of the Brussels-Capital Region is also based on the earlier division of federal inheritance tax and divides the heirs into the same four tax brackets as in the Walloon Region. In the Brussels-Capital Region, too, only those legally cohabiting (as such, officially registered communities) are treated as equivalent to spouses.
The tax rates grow progressively within the tax brackets as shown in the table below. In tax classes 1 and 2 (relatives in ascending and descending line such as children and grandchildren, spouses and legal cohabitants as well as siblings) they are based on the share acquired by the respective heir. In tax classes 3 and 4 (other relatives and third parties), the tax rate relates to the entire estate, so that the applicable progression level is determined based on this and, as a result, several heirs are taxed in a higher progression than if their share of the inheritance were based on their own share.
| Inheritance | Tax class 1 children, spouse |
Owner- occupied apartment, children, spouse |
Tax class 2 siblings |
Tax class 3 uncles, aunts |
Tax class 4 others |
|---|---|---|---|---|---|
| up to € 12,500 | 3% | 2 % | 20% | 35% | 40% |
| € 12,500 - € 25,000 | 3% | 2 % | 25% | 35% | 40% |
| € 25,000 - € 50,000 | 3% | 2 % | 30% | 35% | 40% |
| € 50,000 - € 75,000 | 8th % | 5.3% | 40% | 50% | 55% |
| € 75,000 - € 100,000 | 8th % | 5.3% | 40% | 50% | 65% |
| € 100,000 - € 175,000 | 9% | 6 % | 55% | 60% | 65% |
| 175,000 - 250,000 € | 18% | 12 % | 60% | 70% | 80% |
| € 250,000 - € 500,000 | 24% | 24 % | 65% | 70% | 80% |
| over 500,000 € | 30% | 30 % | 65% | 70% | 80% |
In tax class 1, the acquisition of an apartment in Brussels shared by the testator with the heir is tax-privileged if it was used as the main residence by the testator at least five years before the death of the testator or if it could no longer be used by him due to special circumstances . This concession can be found in the table of inheritance tax for the Brussels-Capital Region under owner-occupied housing .
Allowances
In tax class 1, an allowance of 15,000 euros is granted, in the other tax classes of 1,250 euros. For children of the deceased in tax class 1, the tax exemption increases by 2,500 euros for each year that the child still separates from the 21st year of life. In this case, the surviving spouse or legally cohabiting partner receives half of this additional allowance. If the heir or legatee in tax class 1 and 2 has at least three children who have not yet reached the age of 21, the tax burden is reduced by 2% per child, but not by more than 62 euros per child. In this case, inheriting spouses or legally cohabiting persons receive a tax reduction of 4% per child, but not more than 124 euros per child.
Transfer of company shares
For small and medium-sized companies (fewer than 250 employees, maximum annual turnover 40 million euros, total assets not more than 27 million euros and no participation of a large company with more than 25%), whose activities are industrial, commercial, artisanal, agricultural or professional A tax reduction to 3% can be made. Under other conditions, the testator must have held a stake of at least 25% in the company and the company must be continued for at least five years after the inheritance.
International tax law and double taxation
Because unrestricted taxpayers (resident in Belgium) are subject to inheritance tax on their global assets, double taxation may arise. Inheritance tax already paid abroad can only be offset against inheritance tax already paid abroad in the case of foreign real estate; movable assets are therefore subject to double taxation. However, it is regularly allowed that the foreign taxes paid for this are deducted from the assessment base for the calculation of the Belgian tax. The immovable property of a foreign testator located in Belgium (unlike immovable property) is not subject to inheritance tax there. Belgium has only concluded agreements to avoid double taxation in the area of inheritance law with France and Sweden.
Gift tax
Tax liability
The gift tax is now also levied as a levy for the three regions. In relation to this, however, all regions differentiate between property transferred free of charge and movable property.
The Walloon Region and the Brussels-Capital Region levy gift tax on real estate in the same amount and for the same tax brackets as the inheritance tax. The Flemish Region has retained the corresponding provisions of the former Belgian Inheritance Tax Act, both in terms of tax classes and tax rates, for gift tax. They correspond to the tax brackets and tax rates in the Walloon Region. In the Flemish Region, the extended equality of people actually living together with their spouses in gift tax law also applies.
The same tax reductions or exemptions that are granted in connection with children apply as for inheritance tax, the general exemptions of which, however, do not apply.
A shared home can be given away in Brussels and the Walloon Region under the same conditions as it can be acquired under inheritance tax law.
The gift of movable property is taxed at 3% in tax class 1 (relatives, ascending and descending line, spouse, cohabiting) and otherwise at 7%; in the Walloon Region, a separate rate of 5 applies to tax class 2 (siblings) %.
Tax-free gifts
Donations generally require notarial certification, which triggers gift tax as a form of registration tax that is levied and paid directly by the notary. So-called hand gifts of movable goods that are carried out directly without prior notarization are tax-free. This can be done directly from hand to hand or indirectly via neutral files. An example of a hand gift is the free handover of jewels, jewelry or money or even cash register orders. Indirect settlements take place z. B. for gifts with the involvement of banks. Such gifts are then added to the estate and are therefore subject to inheritance tax if the donor dies within three years of the gift. The uncertainty can be avoided if the gift is voluntarily subject to gift tax, which is significantly lower than inheritance tax for movable property, as there is no deduction in the case of inheritance for taxed gifts.
See also
Individual evidence
- ↑ Art. 1 No. 1 of Royal Decree No. 308 of March 31, 1936, Belgisch Staatsblad of April 7, 1936, page 2403 and of May 7, 1936, page 3426
- ^ Belgisch Staatsblad of January 17, 1989, p. 850
- ↑ Troll-Gebel-Jülicher: Inheritance Tax and Gift Tax Act , loose-leaf commentary, 37th edition 2009, Vahlen, ISBN 978-3-8006-2402-7 , § 21 ErbStG marginal no. 93 (Belgium)
- ↑ Schenken e erven, Tarieven in het Vlaams Gewest , page 11, 22, (Dutch), archived copy ( memento of the original from January 31, 2007 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. (PDF; 633 kB); Dons er successions, Tarifs en Région wallonne , page 10, 23rd, (French), archived copy ( memento of the original from January 31, 2007 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. (PDF; 477 kB); Schenken en Erven, Tarieven in het Brussels Hoofdstedelijk Gewest , pages 12, 23 (Dutch), archived copy ( memento of the original from October 11, 2006 in the Internet Archive ) Info: The archive link has been inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. (PDF; 543 kB)
- ↑ Inheritance Law & Taxes in Belgium (English) ( Memento of the original from October 12, 2008 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.
- ↑ Schenken e erven, Tarieven in het Vlaams Gewest (Dutch), archived copy ( memento of the original from January 31, 2007 in the Internet Archive ) Info: The archive link has been inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. (PDF; 633 kB)
- ↑ Based on Schenken e erven, Tarieven in het Vlaams Gewest (Dutch), archived copy ( memento of the original from January 31, 2007 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. (PDF; 633 kB)
- ↑ Inheritance Law & Taxes in Belgium (English) ( Memento of the original from October 12, 2008 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.
- ↑ In Case C 464/05, Geurts and Vogten, [1]
- ↑ Dons er successions, Tarifs en Région wallonne (French), archived copy ( Memento of the original from January 31, 2007 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. (PDF; 477 kB)
- ↑ Based on Dons er successions, Tarifs en Région wallonne (French), archived copy ( Memento of the original from January 31, 2007 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. (PDF; 477 kB)
- ^ Cour d'Arbitrage, June 22, 2005 n ° 107/2005; 'Dons er successions, Tarifs en Région wallonne' (French). Page 9, Archived copy ( Memento of the original dated January 31, 2007 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. (PDF; 477 kB)
- ↑ Inheritance Law & Taxes in Belgium (English) ( Memento of the original from October 12, 2008 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.
- ↑ Schenken en Erven, Tarieven in het Brussels Hoofdstedelijk Gewest (Dutch), archived copy ( memento of the original from October 11, 2006 in the Internet Archive ) Info: The archive link has been inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. (PDF; 543 kB)
- ↑ Based on Schenken en Erven, Tarieven in het Brussels Hoofdstedelijk Gewest (Dutch), archived copy ( memento of the original from October 11, 2006 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. (PDF; 543 kB)
- ↑ Article 60bis Wetboek der Successierrechte (Dutch) ; Inheritance taxes for small and medium-sized companies (Dutch) ( Memento of the original from August 19, 2007 in the Internet Archive ) Info: The archive link has been inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.
- ↑ Troll-Gebel-Jülicher: Inheritance Tax and Gift Tax Act , loose-leaf commentary, 37th edition 2009, Vahlen, ISBN 978-3-8006-2402-7 , § 21 ErbStG marginal no. 93
- ↑ Schenken e erven, Tarieven in het Vlaams Gewest , page 14 ff., (Dutch), archived copy ( memento of the original from January 31, 2007 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. (PDF; 633 kB); Dons er successions, Tarifs en Région wallonne , page 13 ff., (French), archived copy ( memento of the original from January 31, 2007 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. (PDF; 477 kB); Schenken en Erven, Tarieven in het Brussels Hoofdstedelijk Gewest , page 15 ff. (Dutch), archived copy ( memento of the original from October 11, 2006 in the Internet Archive ) Info: The archive link has been inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. (PDF; 543 kB)
literature
- Troll-Gebel-Jülicher: Inheritance Tax and Gift Tax Act , loose-leaf commentary, 37th edition 2009, Vahlen, ISBN 978-3-8006-2402-7 , § 21 ErbStG marginal no. 93 (Belgium)
- Jill van Eecke: Inheritance law and inheritance tax law in Belgium , Inheritance law forum (PDF; 50 kB)
