Belgium generally is taking a rather sceptical stance towards cryptocurrencies. The government hence issued a number of warnings in order to protect consumers. Just recently they started a campaign on common cryptocurrency frauds. Thus, the government also is imposing some regulations on private individuals as well as businesses operating with cryptocurrencies. It also is aiming for a more strict regulatory framework.
Government statements on cryptocurrencies in Belgium
In 2018 the Belgian government released a website warning Belgian citizens about common cryptocurrency frauds. Under the title “If it’s too good to be true, it’s not true” the government started the campaign to raise awareness of threats posed by cryptocurrencies. The government informs citizens on how they can protect their money and make intelligent investment decisions. Additionally, the website links to a list of fraudulent cryptocurrency platforms and offers the possibility to check if websites or companies are on the authorities’ blacklist.
The National Bank of Belgium, the Financial Services and Markets Authority and the European Banking Authority have warned the public at several occasions about the risk involved in cryptocurrency trading. Furthermore, there is no body exercising prudential supervision and the deposit guarantee mechanism for bank accounts does not apply to virtual currency. Jan Smets, the National Bank of Belgium Gorvenor too emphasises this opinion, stating: “Let’s stop calling bitcoin a currency. Unlike the euro, bitcoin is not guaranteed by a central bank or government as a means of payment so bitcoin is not a currency.” In 2017 several media reports and statements suggested that Belgium aims for stricter regulations of cryptocurrencies. “Crime prevention and regulations should evolve with new technologies,” explained Belgian Minister of Justice, Koen Geens. Yet, there have not been further steps taken and it is to be assumed that Belgium, like many other European countries, is waiting for a common European policy.
Cryptocurrency taxes for individuals in Belgium
According to the Special Tax Inspectorate (STI) in Belgium, anyone who makes gains out of speculating on the cryptocurrency market must pay 33% and list these gains under “miscellaneous income” on their tax returns. Therefore there exists no discrimination between assets and other investments when examining the general capital gains tax of Belgium. Usually, capital gains are exempt to taxation when they are received from the management of private estate, yet they are taxable at 33% when gained from business or speculative activities.
As due to the anonymity of cryptocurrencies, taxation is difficult to control, Belgian tax authorities follow the example of the IRS (Internal Revenue Service of the US) who pressured the exchange Coinbase to legally grant them access to user data for tax purposes. In the end data of “high volume” traders was given access to. Belgian authorities also aim to gain access to this data, using their double tax treaty between the US and Belgium.
Cryptocurrency regulations for businesses in Belgium
The Belgian government published a list with a number of crypto platforms it considers to be fraudulant. Additionally, businsesses face a ban from the FSMA, the Financial Services and Markets Authority) on marketing of certain financial products. This policy was issued in 2014 and applies to products which “consist essentially of derivatives based on virtual currencies such as Bitcoin”. At the same time the government issued a warning on risks linked to cryptocurrencies. This year, 2018, a new warning was issued via the webiste “Trop beau pour être vrai”, meaning too good to be true (as stated above).
Belgian think tank issues policy contribution for EU ministers
Belgian based think tank, Bruegel, in September 2018 published a policy contribution which was forwarded to the EU finance ministers who met in Vienna in September 2018. The contribution, a call for unified legislation, urged the European Union for clear regulations to meet potential risks of cryptocurrencies and blockchain technology. The paper initiated and emphasized the discussion on potential consequences of the usage of cryptocurrencies for illicit activities such as tax evasion, terrorist financing and money laundering and also addressed technical fundamentals such as the lack of transparency.
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The information provided in this blog post is for general information purposes only. The information was completed to the best of our knowledge and does not claim either correctness or accuracy. For detailed information on crypto regulations we recommend contacting a certified legal advisor in the specific country.
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