As part of its 2017 budgetary measures, the Belgian legislator expanded the scope of the stock exchange tax (taxe sur les opérations de bourse or Beurstaks), colloquially known as the TOB, to cover transactions executed on behalf of Belgian residents through non-Belgian financial intermediaries. The amendment may have significant implications for Swiss banks, brokers and wealth managers processing financial transactions for the benefit of Belgian tax residents.

The new regime now covers transactions executed by Belgian residents outside of Belgium. As an example, a transaction executed through a Swiss bank on behalf of a Belgian tax resident is now subject to TOB.

The applicable rates are:

• 0.09% on bonds (capped at EUR 1,300)
• 0.27% on stocks (capped at EUR 1,600)
• 1.32% on investment funds (capped at EUR 4,000)

The new rules apply with effect from 1 January 2017. The Belgian authorities have publicly announced their intention to grant a deadline extension in order to enable taxpayers to satisfy their compliance obligations. The first TOB return, covering transactions executed between 1 January 2017 and 30 April 2017, will have to be filed by 30 June 2017. The first TOB payment will have to be made by 30 June 2017 as well.

Thereafter, TOB returns (and corresponding payments) will have to be filed on a monthly or bi-monthly basis.

Swiss financial institutions may opt to act as withholding agents for the purpose of the TOB. By doing so, they would become responsible for the correct application of the TOB rules. It is worth noting that this regime is optional and should be assessed on an individual basis in light of operational, commercial, and risk-related implications.

Financial institutions considering undesirable to act as withholding agents for the purpose of the TOB may still want to assist their Belgian resident clients in meeting their tax compliance obligations by providing them with the relevant transactional information, including the amount of TOB to be declared and paid.

In summary, three options are available to Swiss financial institutions:

1. Do nothing: Belgian resident clients have to autonomously self-assess, pay and declare the TOB within the prescribed deadlines. Failure to do so may result in penalties or late interest at the level of the clients.
2. Withholding option: Swiss financial institutions are responsible for calculating, collecting and depositing the tax with the Belgian tax authorities. Failure to do so may result in penalties or late interest at the level of the Swiss financial institutions. It is worth noting that Swiss financial institutions may also designate a Belgian representative, which would be jointly liable to declaring and paying the tax.
3. Reporting option: Since many Swiss banks already provide tax reporting services to their foreign account holders (in order to facilitate the completion of their respective tax returns), such banks may find it practically convenient to include any relevant TOB information in the tax reports sent to their Belgian clients.

Markus Weber - Partner, Financial Services Tax Leader Switzerland

Markus heads the Financial Services Tax practice. He has more than ten years of experience in advising financial institutions in the banking, insurance and asset management sector, covering the full range of relevant taxes. Prior to joining Deloitte, he was the managing director of a fund management company, followed by a role as executive director in the group tax department of a leading Swiss bank, where he was in charge of compliance with cross-border U.S. tax regulations.

Email

André Kuhn - Director, Financial Services Tax

André is a Swiss Certified Tax Expert with twelve years of experience in corporate international taxation. He leads the Swiss corporate tax team in Zurich that advises banks, insurance companies and asset managers on Swiss tax matters. As tax responsible for the investment management industry in Switzerland, he also acts as the subject matter expert on all tax aspects of collective investment schemes.

Email

Nenad Ilic - Director, Cross-Border Tax

Nenad is a Tax Director with Deloitte Luxembourg. He assists banks and asset managers on various tax matters, including corporate tax, transactional tax planning, operational tax and taxation of investment funds. He is the author of several articles on FATCA and is a regular speaker on operational tax topics.

Email