A new Belgian "exit tax" regime has been tabled. Here’s what you need to know.
1. Legislative Update
On 27 May 2025, the Belgian government submitted to Parliament a draft programme law that, among other things, introduces a new 'exit tax' regime for shareholders.
While the legislative text partially integrates the concerns raised by the Council of State, the core mechanism remains unchanged: shareholders will be taxed on a deemed liquidation dividend when a Belgian company relocates its statutory seat abroad – regardless of whether the shareholder emigrates or not.
2. The "Exit tax" in a nutshell
According to this new regime, when/if a Belgian company transfers its statutory seat abroad, its shareholders will be deemed to receive a liquidation dividend– even if they remain in Belgium and receive no actual payment.
This legal fiction is applicable regardless of whether the shareholder is:
- a Belgian-resident individual,
- a Belgian company or legal entity,
- or a non-resident.
The tax due depends on the shareholder’s status, but in most cases, Belgian residents will be taxed at 30% on this fictitious dividend, unless exceptions apply.
If the relocation is to an EU or EEA Member State with which Belgium has a mutual assistance agreement for tax collection, the shareholder may opt for a five-year deferral:
- 1/5th payable immediately;
- the remaining 4/5ths spread equally over four years.
This deferral must be requested within two months following the issuance of the tax assessment. It is a cash flow relief measure – not a tax exemption – and cannot be extended further.
The draft law also introduces a partial relief from double taxation. If the company later distributes dividends drawn from the transferred assets and the shareholder can prove the link, the initial deemed dividend may be exempted. In practice, however, tracing the origin of distributed dividends through complex cross-border structures may prove unrealistic!
3. Example: Exodus SRL and the “stay tax” in action
Exodus SRL, a Belgian-resident company, is fully owned by Mr. Bob and Ms. Marley, each holding 50% of the shares. The company decides to relocate its statutory seat and operations abroad.
At the time of the move, the company's balance sheet includes:
- Paid-up capital: €100,000
- Taxed reserves: €600,000
- Current-year profit: €50,000
- Tax book value of assets: €900,000
- Market value of assets: €1,600,000
- Outstanding debt: €150,000
Tax perspective:
- The corporate income tax base includes the current-year profit (€50,000) and latent capital gains on assets (€700,000), totalling €750,000.
- At a standard corporate tax rate of 25%, the company owes €187,500.
Deemed dividend to shareholders:
€1,600,000 (market value of assets)
– €150,000 (liabilities)
– €100,000 (paid-up capital)
= €1,350,000
After corporate tax (€187,500), the net deemed distribution to shareholders is €1,162,500.
Since each shareholder holds 50%, both Mr. Bob and Ms. Marley are deemed to receive €581,250. This fictitious income must be reported in their personal income tax return and is subject to 30% withholding tax, i.e. €174,375 each – unless exemptions apply.
This occurs without any actual cash distribution, and even if both shareholders remain Belgian residents.
4. A misnomer: this is not an “exit tax”
In practice, this tax applies even when the shareholder stays in Belgium, without having received any actual dividend.
The tax is triggered by a company-level move yet the burden falls on individuals who may have had no decision-making power in the relocation.
It is, in essence, a “stay tax”.
5. Constitutional and EU law concerns remain
Despite recent amendments, the tax still raises serious constitutional and EU law concerns:
- It applies equally to minority and majority shareholders, regardless of their ability to influence the transfer decision – potentially violating the principle of equality.
- It may constitute an unjustified restriction on the freedom of establishment, especially when Belgium retains its taxing rights over resident shareholders.
- The deferral mechanism (1/5th upfront, 4/5ths over four years) may not fully comply with EU case law, which often requires deferral until actual realisation or loss.
- A corrective mechanism allows deduction of foreign tax paid on the same income, but its practical scope and implementation remain unclear.
- The Council of State references the Panayi judgment (CJEU, C-646/15) to support the measure, but the analogy is questionable: in Panayi, the taxpayer moved residence voluntarily. Here, the shareholder may remain in Belgium and have no involvement in the relocation.
6. Limited budgetary impact
The Belgian Court of Audit itself highlights that expected revenues from the measure are limited and uncertain, casting doubt on both its effectiveness and its necessity.
This weakens any future defence before the Constitutional Court to maintain the effects of a potentially annulled provision.
7. What now?
Clients concerned by this new rule – particularly Belgian-resident shareholdersin companies with cross-border mobility – should:
- Assess their exposure under the proposed regime;
- Consider the feasibility of a constitutional challenge before the Belgian Constitutional Court; and
- Explore mitigation strategies or revised corporate structuring.
Our team is closely monitoring the legislative process and can provide tailored advice on the scope of the tax, available legal remedies, and strategic options.
Authors: Geoffroy Galéa and Théo Grüter, lawyers at Fieldfisher
