Belgium isn’t the heart of Europe’s trading battleground. Even while it’s home to one of the biggest companies in the world (AB Inbev). The exchange in Brussels is part of Euronext.

The Dutch see the country as a little nephew. Next year, when European Championship kick off – everybody will support the Belgium team. Holland won’t qualify.

There’s one little thing wrong with Belgium. The current government. This weekend a new financial tax has been created, which is nothing short of amazing. It has got three problems. It makes no sense, it is not fair and it won’t work.

Speculatietaks

Introduced is the speculatietaks. Meaning “tax on speculation”. If you make an investment in a stock, and take a profit within a timeframe of six months, you’ll be called a speculator. Speculators get taxed with huge 33%. Holding on to your stock positions will avoid the tax.

Losses on investments are ignored. Only the winners are taxed. Say you have  split your investment portfolio in two stocks. You make 20k profit on AB Inbev and lose 14k in Solvay. You would be paying a tax of € 6600.

mom and pop investors

It gets even better. The tax aims at local mom and pop investors. All companies, legal entities and foreigners are exempt. Belgian investors with a brokerage account abroad are exempt, too. Open an account in The Netherlands and you’ll be fine. This sheds another light on Binck, walking away from take-over talks with Belgian broker Keytrade. Whatever your opinion is on speculation, nobody would have thought the Belgian retail investors are behind the volatility.

Only stocks

That’s not all. It gets even more hilarious. Only stocks are taxed. More speculative instruments such as options, single stock futures, CFD’s, turbo’s and speeders aren’t taken into account with the speculatietaks.

If you happen to have bought shares in a company which gets taken over, you don’t have to pay the tax. That’s very kind. You have to be a real clown to be taxed. Alternatively, Belgian citizens with bad luck could be hit. Unexpectedly forced to liquidate recent bought stock portfolio (for example, a divorce). For the rest of the country, avoiding the tax isn’t even a challenge.

Revenue €28 million

The government expects a revenue of 28 million (sold!). That’s less than half the price of a Joint Strike Fighter. Maybe some people should refrain from drinking the wonderful Belgian beers while working for the government.

Having a government of a developed nation introducing this kind of ideas is a joke. And scary. After all, isn’t the European capital in Brussels? The tax starts on January 1st, 2016. Amai, this means Belgian investors buying stocks today pay tax when they take a profit in January.

Jack
Jack