New CGT: Impact on Corporate Structuring, Private Equity and M&A

The CGT applies only to individuals and non-profit entities that are tax residents in Belgium. Companies subject to corporate income tax remain outside its scope, which immediately creates an important distinction between private and corporate holding of assets. The tax covers a wide range of financial instruments, including listed and unlisted shares, bonds, ETFs, currencies, crypto-assets, certain insurance products and derivatives.

The regime focuses on transactions carried out in the context of normal private wealth management and outside any professional activities. Only transactions for consideration—such as sales—fall within scope, while gifts and inheritances remain excluded.

As from 1 January 2026, a general rate of 10% will apply to capital gains, with a limited annual exemption. However, the legislator has introduced specific CGT rates in certain cases. The so-called “internal capital gains”—arising from transfers of shares to a company over which the taxpayer (alone or together with close family members or relatives) exercises direct or indirect control—are subject to a significantly higher rate of 33%. For substantial shareholdings, defined as direct participations of at least 20% of the rights in a company, a progressive tax rate system applies (ranging from 1.25% to 10%), including a full exemption for the first EUR 1 million.

A key feature of the new regime is the so-called “step-up” mechanism. Only capital gains accrued as from 1 January 2026 will be taxable, as the value of assets on 31 December 2025 serves as the baseline. In addition, the FIFO method (“first in, first out”) applies to determine which assets are deemed to be sold in the case of a gradually built portfolio. Losses may only be offset within the same taxable period and within the same category of assets, while the use of historical losses is largely excluded.

From a structuring perspective, the exclusion of corporate taxpayers from the CGT regime is likely to increase the attractiveness of holding structures. Individuals may be incentivised to hold investments through corporate vehicles or investment funds in order to benefit from the corporate tax regime and its various exemptions applicable to capital gains on shares (and dividends). However, such strategies will need to be carefully assessed in light of anti-abuse rules and the risk of requalification, particularly in the context of internal capital gains, vendor loans, etc.

The new rules will also influence exit strategies, especially for founders and investors holding substantial stakes. The progressive tax regime on substantial shareholdings may increase the importance of timing in exit strategies or may encourage alternative structuring techniques. In a private equity context, even greater attention will need to be paid to management participation plans, co-investment structures and carried interest planning.

In M&A transactions more broadly, the CGT is likely to affect deal structuring and negotiations. The tax profile of the seller—whether acting in a personal or corporate capacity—may become a more prominent factor in determining transaction mechanics and pricing. At the same time, corporate reorganisations, although in principle allowing for CGT exemptions in various cases, are expected to be subject to closer scrutiny by the tax authorities.

Finally, the practical implementation of the regime will raise frequent and highly relevant valuation and documentation challenges. The reference date of 31 December 2025 will require taxpayers to substantiate asset values with appropriate evidence, increasing the importance of robust valuation methodologies and, potentially, advance rulings.

In conclusion, while the CGT formally targets private individuals, its introduction represents a structural shift with far-reaching implications for corporate structuring, private equity and M&A. In-depth planning and careful analysis will be essential to navigate this new tax effectively.