Frequently asked questions - Capital Gains Tax

Capital Gains Tax

This 10% capital gains tax applies to natural persons with a tax residence in Belgium and non-profit associations and foundations with the exception of those that are being recognised as tax deductible for gifts.

Natural persons with a tax residence outside Belgium and legal entities (such as companies that are subject to corporate income tax) are exempt from capital gains tax.

A 10% tax applies to capital gains realized upon surrender or maturity of certain life insurance policies.

More specifically, the following policies are affected:

  • Branch 21 savings insurance:
    • for which the eight-year term has expired
    • with death benefit coverage of at least 130% of the premiums paid
  • Branch 23 investment insurance policies
  • Investment insurance policies combining Branch 21 and Branch 23, also known as Branch 44.

If a Branch 21 or 26 policy (capitalization transaction) is subject to withholding tax on interest income, no capital gains tax will apply.

This capital gains tax does not apply to second- and third-pillar insurance contracts (group insurance, individual pension commitments, CPTI, PLCI, pension savings insurance, and long-term savings contracts).

The capital gains tax rate is 10%.

Capital gains tax applies only to capital gains realized on or after January 1, 2026. Capital gains accrued before that date are exempt.

  • For contracts entered into on or after January 1, 2026, the taxable capital gain is the positive difference between the paid-out capital and the total amount of premiums paid.
  • For contracts entered into before January 1, 2026, the reserve as of December 31, 2025 (the “snapshot date”) serves as the reference value. In this case, the taxable capital gain is the positive difference between the paid-out capital and this reserve.

Realized capital losses may be deducted from realized capital gains, provided they relate to the same category of financial assets and were realized in the same year.
Capital losses are always deducted through the tax return (see below). You must therefore request this deduction yourself.
However, it is not possible to carry forward capital losses to the following year.

There is a basic annual exemption of €10,000 per taxpayer on the total capital gains realized during a single year. This amount is adjusted annually.
Taxpayers who do not use the exemption may carry forward a maximum of 1,000 euros to the following year for up to 5 years, up to a total of 15,000 euros.

When a life insurance policy is subject to capital gains tax, the tax is due as soon as a capital gain is realized upon surrender or upon the payment of the death benefit at the end of the policy term.
If the policy is paid out following the death of the insured, the beneficiaries under the death benefit clause do not have to pay any capital gains tax on the realized gains. It goes without saying, however, that inheritance tax may still be due in accordance with applicable law.

There are two ways to collect capital gains tax.

  • The standard method is withholding tax (opt-in).

The standard method provided for by law is withholding at source. This means that the insurance company automatically withholds the tax when the lump-sum payment is made and remits it to the tax authorities.

You can include these capital gains on your tax return to take advantage of the annual exemption and to deduct any capital losses.

  • With the other method, there is no withholding tax (opt-out).

If you choose this option, you must report the capital gains received on your tax return.

In this case, you must notify your insurance company, which will not withhold the tax when the principal is paid out.

For both options, the insurance company will issue an annual tax statement.

For 2026, there is a transitional arrangement. Until September 1, 2026, no withholding tax will be applied (opt-out system) unless the policyholder objects in writing.

Whenever you request a cash surrender, the insurance company will send you a settlement form on which you can indicate your choice.
This choice is valid for the entire tax year. Any revocation will take effect only for the following year.