Belgian Crypto Tax Guide: How to Declare Step-by-Step

In Belgium, when declaring your cryptocurrency-related activities, you can be classified into three categories:

1. Prudent Manager

2. Speculative Investor

3. Professional Trader

The distinction between these categories is not strictly defined, making it important to assess where you fit. Your classification will determine which transactions are taxable, how to declare your income, and the applicable tax rates.

Passive Income

Regardless of your classification, your passive income generated from cryptocurrencies may be taxable. Article 17 of the Wetboek van de Inkomstenbelastingen (WIB) specifies that income from movable property and capital is subject to taxation. This includes:

• Dividends

• Interest

• Rental income from movable property

• Annuities

• Income from copyright assignment or concession

Interest earned from crypto lending platforms is generally considered taxable. Although staking is not explicitly mentioned, it may be treated as income from capital. Consulting with a tax advisor can help clarify whether your passive income, such as staking rewards, should be declared as income from movable property and capital.

Prudent Manager

As a prudent manager, under the “goede huisvader principe,” capital gains from your crypto investments are not taxable. However, if you earn passive income (e.g., interest from lending cryptocurrencies), this must be declared.

How to Declare as a Prudent Manager

1. Go to My MinFin to begin your tax declaration.

2. If you have no passive income, there’s no need to declare anything.

3. If you do have passive income (e.g., interest):

   • Navigate to Deel 1, then Vak VII for Inkomsten van kapitalen en roerende goederen.

   • Enter the amount in field 1444, under b) Andere inkomsten zonder roerende voorheffing. 1)belastbaar tegen 30 %.

Speculative Investor

As a speculative investor, your capital gains from cryptocurrency are taxed as miscellaneous income at a rate of 33%. Additionally, you can deduct capital losses from your miscellaneous income for the year in question and up to five subsequent years.

How to Declare as a Speculative Investor

1. Head to My MinFin to start your tax declaration.

2. If you have passive income:

   • Navigate to Deel 1*, then Vak VII** for Inkomsten van kapitalen en roerende goederen.

   • Enter your passive income in field 1444, under b) Andere inkomsten zonder roerende voorheffing. 1)belastbaar tegen 30 %.

3. If you have capital gains from cryptocurrency trading:

   • Go to Deel 2, then Vak XV for Diverse inkomsten.

   • Enter your miscellaneous income in field 1440 (brutobedrag). Divly accounts for any fees in its miscellaneous income calculations.

4. If you have made losses in the past five years that you wish to deduct:

   • Report them in field 1202, under c) nog niet afgetrokken verliezen van de vorige 5 jaren.

Professional Trader

As a professional trader, your capital gains from cryptocurrencies and mining activities are taxed at your income tax rate, which ranges from 25% to 50%.

How to Declare as a Professional Trader

1. Head to My MinFin to begin your tax declaration.

2. Go to Deel 2, then Vak XIV for Beroep en ondernemingsnummer to enter your business number and profession.

3. Proceed to Vak XVII for Winst uit nijverheids-, handels-, of landbouwondernemingen.

   • Enter your capital gains in field 1600, under Brutowinst van de eigenlijke exploitatie.

   • Report your social contributions in field 1632, and any professional expenses (e.g., mining equipment) in field 1606.

4. If you have business losses from previous years that you haven’t deducted yet, report them in Deel 1 Vak VIII, under Aftrekbare Vorige Verliezen en Bestedingen, in field 1349.

Am I a Prudent Manager, Speculative Investor, or Professional Trader?

Determining whether you are a prudent manager, speculative investor, or professional trader is not always clear-cut.

Prudent Manager

A prudent manager engages in normal asset management, which typically involves:

• Low-risk, long-term investing aimed at protecting capital.

• Infrequent buying and selling of assets.

Although cryptocurrency trading can be inherently risky, it doesn’t automatically exclude you from being considered a prudent manager. For instance, if you invest only a fraction of your assets in crypto with a long-term holding strategy, you may still qualify as a prudent manager.

Speculative Investor

A speculative investor engages in asset management outside of normal management. Characteristics of a speculative investor include:

• Frequent and higher-volume trades aimed at short-term profits.

• Investing a significant portion of your assets (e.g., 30% or more) in cryptocurrency.

• Conducting advanced transactions, such as trading derivatives or using automated tools to manage your portfolio.

Professional Trader

A professional trader seeks to generate income from their activities. Key traits of a professional trader include:

• Using professional equipment and trading tools to achieve profitability.

• Mining cryptocurrency can also be considered a professional activity.

How to Determine Your Investor Type

The FPS/SPF Finance has created a list of 17 questions to help you determine your investor type for taxation purposes. Divly's report can assist you in answering some of these questions by providing statistics about your portfolio. In the list of questions below, Divly can help you answer the bolded questions.

1. How did you come into possession of cryptocurrencies (for example, through inheritance, donation, personal savings, reinvestment of movable or immovable property, etc.…)?

2. How many years have you been investing in cryptocurrencies?

3. How frequently do you buy and sell cryptocurrencies, in other words, how many times per year do you carry out this type of transaction (once, daily, every week, every month, a few times per year, etc.)? Please provide the details of all transactions carried out so far (purchases, sales, conversions from one cryptocurrency to another, etc.), indicating the dates and amounts of the operations.

4. How long have the cryptocurrencies you wish to transfer/dispose of been in your possession?

5. What is your investment strategy when it comes to cryptocurrencies? (- buy & hold, hold virtual currencies for a long period of time, - trending, exchange/sell based on a technical analysis of market rates or trends, - active trading / day trading, - scalping, making small profits on positions held very briefly, - arbitrage, buying and selling on different exchanges to take advantage of price differences on these exchanges.)

6. Do you do mining through your own mining rig or a mining pool? If yes, please provide further explanation.

7. Do you buy or sell cryptocurrencies through an automated process or automatic software?

8. Did you design this process/software yourself? Please provide the necessary details.

9. What is your current professional activity? What studies have you done? Have you acquired knowledge about cryptocurrencies in your professional activity?

10. Have you invested in a cryptocurrency investment fund? Please provide the necessary details.

11. Are you active in the cryptocurrency community on forums or through blogs? Do you give lectures on the subject? Please provide the necessary details.

12. What percentage of your assets (movable) have you invested in cryptocurrencies? Do you also invest in other movable assets (for example, stocks, bonds, paintings, gold, ...)? If so, please specify in which other movable assets you have invested and the proportion of your investment in cryptocurrencies compared to other investments.

13. Do you use any special equipment to protect your cryptocurrencies (for example, a hardware wallet)? If yes, please provide further explanation.

14. Do you also invest in cryptocurrencies for other people? If yes, please specify for whom and for what amount.

15. Have you borrowed to finance your purchases of cryptocurrencies? If yes, for what amount and from whom did you borrow?

16. What is the market value of your cryptocurrency portfolio currently (mentioning the date)?

17. Do you rely on the opinion of financial and/or IT professionals for your cryptocurrency investments?”

Any tax-related information provided by us is not tax advice, financial advice, accounting advice, or legal advice and cannot be used by you or any other party for the purpose of avoiding tax penalties. You should seek the advice of a tax professional regarding your particular circumstances. We make no claims, promises, or warranties about the accuracy of the information provided herein. Everything included herein is our opinion and not a statement of fact.