Is there a capital gains tax on diamonds as investment?

  • In the last 10 years, the capital gains tax on bond funds doubled.
  • The capital gains tax on bond funds is calculated via the TIS (Taxable Income per Share).
  • Capital gain after selling diamonds is not taxed.

As of January 1st, a new series of measures will come into effect. For example, the capital gains tax on bond and mixed funds will increase by 30 percent. In the last 10 years, the application of the tax has been extended significantly and the pricing has doubled.

In 10 years time the tax has doubled

The implementation of the tax in 2006 was based on the fact that investors who invest in funds should also pay a withholding tax on their incomes, similar to the people that invest in bonds directly. Funds (with a European passport) that invested for at least 40 percent in bonds were subjected to this rule.

Two years later, in 2008, the capital gains tax was extended to the full capital gain of bonds in a fund. It thus included both the interest and the price appreciation, as well.

In 2011, the threshold of at least 40 percent investments in bonds was lowered to 25 percent, to make sure more mixed funds were eligible for the capital gains tax. Another two years later, in 2013, the tax’s scope was again extended to funds without a European passport. Because of this measure, capital funds now came to the fore.

The next adaptation is planned for 2017. De capital gains tax will rise from 27 to 30 percent. Regarding capital funds, the cap of the stock exchange will be raised from 2.000 to 4.000 euros as well.

To calculate the capital gains tax, funds should first compute a Belgian TIS (Taxable Income per Share). A TIS is a capital gain realised on the bond share of the fund between purchase and sale date. As this is a specific Belgian measure, it is often difficult for foreign funds to have this calculated, increasing the risk of having to pay taxes on the full capital gain of bonds.

When investing in diamonds, the capital gain tax is not of importance. The capital gain realised after your sale is not taxed, after all. For more information about investing in diamonds, read the following articles:

Author: San Meuleman

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