2018 Tax Return : Box VII – Investment Income

Box VII is for the income of your investments, i.e. dividends and interest.

These are normally taxed at source; the (Belgian) bank or the company that pays the dividend deducts 30% tax when they pay out. If that is the case, you don’t have to declare the interest or dividends in your tax return, but foreign banks do not withhold Belgian tax

If you received interest on a regulated savings account, that is tax exempt up to €1,880 per spouse or per partner. Any interest over €1,880 is taxed at 15% and must be reported in code 1151/2151. The same applies to comparable savings accounts within the European Economic Area. If the bank pays you more than €1,880, it will deduct 15%, but the bank doesn’t know if you had interest on other savings accounts. If the total interest on all your savings accounts, in Belgium and abroad, is more than €1,880, you have to complete code 1151/2151. Non regulated savings accounts are taxed at 30%.

It is only when the bank has not deducted the 30% tax – mostly because it is a foreign bank – that you have to report the income under the correct codes, usually 1444/2444.

30% on interest and dividends is quite high as a tax, compared to 15% just a few years ago.  If you have little taxable income, you may opt to have your dividends and interest taxed with your other (taxable) income. The first €7,230 (or €7,570  if you have little income) is exempt as a personal allowance, and then the tax rates start at 25%. If the average tax rate is less than the 30% withheld at source, the difference is reimbursed.  Taxpayers with investment income under the higher personal allowance of €7,570 can even recover all tax withheld on their savings.

Overseas bank accounts

Interest on overseas bank accounts has to be reported, usually in code 1444/2444.

The other country will also want to tax the dividends or interest. Under the double tax treaty (see the list/map), that will be a maximum of 10 or 15%; usually you will have to provide a certificate of residence in Belgium. If tax has been deducted, you report the net income after tax and 30% tax is due on the net.

 

Your Tax Return :

Author: Marc Quaghebeur

Marc Quaghebeur is a Belgian tax lawyer with Cabinet DAVID specialising in international tax issues and cross border estate planning. He is a member of the Brussels Bar and the Society of Trust and Estate Practitioners. He

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