Exit tax and your emigration to Spain

The prospect of living under the Spanish sun, characterised by a pleasant climate and a high quality of life, has attracted Belgians for decades. This consideration is often reinforced by the perception of a more favourable tax regime. However, the Belgian federal government has announced a sweeping tax reform to take effect from 1 January 2026. This reform is not a mere adjustment of existing rules; it introduces a fundamentally new concept in Belgian personal income tax: a general capital gains tax on financial assets.

Anybody considering a move is that a so-called "exit tax" will be attached to this new tax. This tax specifically targets individuals who establish their tax residence outside Belgium. The introduction of this legislation creates considerable uncertainty and potential financial disadvantages for Belgians with an investment portfolio who have concrete emigration plans.

In this article, we will dissect the precise mechanisms of the new Belgian legislation, examine in detail the tax implications of moving to Spain, and explain the interaction with the double taxation treaty between Belgium and Spain.

Note: The legislation on the exit tax is not yet final. Only a political agreement has been reached yet. This blog post is based on the information already available.

Belgium's new capital gains tax: a thorough review

To understand the impact of the exit tax, a thorough knowledge of the underlying capital gains tax, officially a "solidarity contribution", is indispensable. After all, this new tax forms the basis on which the exit tax is calculated.

Principles and entry into force

At the heart of the reform is the introduction of a tax on realised capital gains on a very wide range of financial assets. The scope includes shares, bonds, derivatives, mutual funds, ETFs, crypto assets, and even certain life insurance products (branches 21, 23, 26). The law applies to individuals subject to personal income tax and certain legal entities subject to the legal entities tax, such as not-for-profit associations and private foundations. Commercial companies, whose capital gains are already subject to corporate income tax, are not affected.  

The effective date is set at 1 January 2026. This date is of capital importance and acts as a hard deadline at the heart of any strategic planning.  

The crucial exemption of historical capital gains: the "Step-Up"

A reassuring principle of the new law is non-retroactivity. Only capital gains that are accrued and realised from 1 January 2026 are subject to tax. All historical deferred (unrealised) capital gains accrued up to 31 December 2025 are explicitly exempted.  

Technically, this is achieved through a statutory "step-up" of the acquisition value. For assets acquired before 1 January 2026, the acquisition value for calculating future capital gains is notionally equated to their market value on 31 December 2025. If the original, historical purchase price was higher, that higher value may be retained.  

However, this step-up is not passive; it places a significant administrative and evidentiary burden on the taxpayer. The law provides specific and hierarchical valuation rules to determine the value as at 31 December 2025 :  

• Listed assets: The closing price on 31 December 2025.
• Unlisted assets: This is where things get more complex. The value is the higher of various lump sums, such as the value in a recent transaction between independent parties, contractual valuation formulas, or a calculation based on a formula such as equity + 4x EBITDA.
• Alternative rating: The taxpayer has the option to opt for an independent and substantiated valuation prepared by a company auditor or a certified accountant. This valuation report must be prepared before the end of 2026.

The introduction of this step-up is a politically necessary measure to make the law legally sustainable by avoiding retroactivity. However, the inevitable consequence is that it creates a huge, one-off administrative and financial obligation for any Belgian investor. It is no longer an option but a necessity to have the entire portfolio professionally valued as of that date and to document this valuation conclusively.

Indeed, the burden of proof for this value is implicitly, but undeniably, on the taxpayer. Without a proactive, detailed and substantiated valuation, especially for unlisted assets, the taxpayer opens the door to future, protracted discussions and potentially arbitrary valuations by the tax authorities. This could result in significantly higher and unforeseen tax assessments in the future. Thus, the law not only creates a new tax but also an imperative planning and documentation requirement that should not be taken lightly.

The three tax regimes: a differentiated approach

The legislator has adopted a differentiated approach and strictly distinguishes between three categories of capital gains. These regimes are mutually exclusive, meaning that a specific capital gain can only fall under one regime.  

Regime 1: internal capital gains (33%)

This regime is essentially a tightening of an existing anti-abuse provision. It targets capital gains realised on the sale of shares to a company controlled by the seller, whether or not together with his close relatives (up to the second degree). The high rate of 33% is designed to prevent cash from being taken out of an operating company in a tax-advantaged manner through a personal holding structure.  

Regime 2: substantial interest (progressive rates)

This regime applies to capital gains realised on the sale of shares, if at the time of transfer the seller is at least 20% of the rights in the relevant company. The tax treatment here is more nuanced:  

• A one-off foot exemption on the first €1.000.000 to realised capital gains. This exemption is a "backpack" that can be used over a rolling five-year period.  
• Above this exempt amount, progressive rates per bracket apply:
  • From €1,000,000 to €2,500,000: 1.25%
  • From €2,500,000 to €5,000,000: 2.5%
  • From €5,000,000 to €10,000,000: 5%
  • Above €10,000,000: 10%.  

Regime 3: general regime (10%)

This is the default regime that applies to all other capital gains on financial assets not covered by the first two regimes. This includes, for example, listed shares in which one holds an interest of less than 20%, bonds, mutual funds and crypto assets.

• The rate shall be a fixed percentage of 10%.  
• A basic annual exemption is provided for €10.000 per taxpayer. An unused part of this exemption can be carried forward to subsequent years in a limited way, with a maximum of €15,000 after five years.  

The creation of these three separate regimes forces differentiated and segmented wealth planning. The tax strategy for a director-major shareholder with a 50% interest in his family business, who falls under the progressive substantial interest regime, is fundamentally different from that for an individual with a diversified securities portfolio, who falls under the general 10% regime.

If you have a substantial interest, your planning will need to focus on making the most of the €1 million exemption over the five-year period, which may lead to strategic considerations such as staggered sales or restructurings. However, if you mainly fall under the general regime, your focus will be more on realising gains up to the €10,000 exemption annually and managing the 10% levy on larger gains.

The Exit Tax - a fictitious exit settlement

The exit tax is the capstone of the new capital gains tax and is specifically designed to prevent taxpayers from evading the new tax by simply emigrating.

Legal framework and objective

Legally-technically, the exit tax is an immediate levy on the unrealised (latent) capital gains on the entire portfolio of financial assets. The taxable event is the transfer of a Belgian resident's tax residence abroad. This emigration is treated by the legislator for tax purposes as a "deemed disposal" or a deemed realisation of all assets. Here, the market value of the assets on the day of emigration is considered the notional sale price.  

The legislator's explicit objective is to combat tax avoidance. The aim is to prevent a taxpayer, sitting on a substantial deferred capital gain, from strategically moving abroad just before he or she effectively realises this capital gain, in order to avoid the new Belgian tax.  

Calculation of taxable base

The calculation of the exit tax follows the logic of the general capital gains tax. The taxable base is the difference between:

1. The market value of financial assets at the date of emigration.
2. The acquisition cost, which for assets acquired before 1 January 2026, thanks to the step-up, is the determined value per 31 December 2025 will be.  

The applicable rates (10% for the general regime, the progressive scales for a substantial interest, or 33% for internal capital gains) depend on the nature of the assets in the portfolio, just as if an actual sale were to take place at the time.

Compatibility with European law: a potential stumbling block

The principle of an exit tax is at odds with the fundamental freedoms that form the cornerstone of the European Union, in particular freedom of establishment and free movement of persons. The obligation to pay a tax merely because one exercises the right to live in another member state can be considered a barrier.

The case law of the European Court of Justice (ECJ) in cases concerning the exit tax for companies (such as the well-known judgments National Grid Indus and DMC) provides clear and unmistakable guidance here. The Court held that a member state has the right to tax capital gains accrued in its territory at the time of an "exit". This is a legitimate safeguard to the allocation of taxing power. However, the immediate and mandatory recovery of that tax on as yet unrealised capital gains constitutes a disproportionate obstacle to EU freedoms.

This exit tax creates what could be called a "liquidity paradox". The taxpayer faces a potentially significant tax liability, with no corresponding cash flow from a sale.

The political compromise is less drastic than an immediate levy on deferred capital gains, but creates a continuous link with the Belgian tax authorities during the first years after emigration.  

When a taxpayer moves his or her tax residence abroad, he or she will, for a period of two years continue to be obliged to report on his/her financial assets and any realised capital gains on them. If capital gains are realised within this two-year period through the sale of these assets, these gains will remain taxable in Belgium under the new capital gains tax rules.  

After the expiry of the two-year period, this reporting requirement expires. So from then on, it is in principle possible to leave abroad and sell the assets without paying capital gains tax.  

For the emigrant, this means that a move does not offer immediate tax freedom. During the first two years abroad, one must continue to closely follow Belgian tax law and a portfolio sale is still subject to Belgian taxation.

Consequences in Spain

Successful emigration planning requires an equally thorough analysis of the tax laws in the destination country. In this regard, Spain offers two fundamentally different regimes, the choice of which will determine the tax treatment of your investment portfolio.

The Spanish standard regime for residents

As soon as a person becomes a tax resident in Spain - which is usually the case when staying in Spain for more than 183 days in a calendar year - they basically become taxable on the global income and assets.  

• Capital gains on investments: Realised capital gains ("rendimientos del capital mobiliario" or "ganancias patrimoniales") are progressively taxed in the so-called "base del ahorro". The rates are 19% on the first €6,000, 21% up to €50,000, 23% up to €200,000, 27% up to €300,000 and 28% on everything above that.  
• Wealth tax: Spain has a national wealth tax ("Impuesto sobre el Patrimonio"), but the concrete application (rates and exemptions) has been transferred to the autonomous regions. This leads to big differences. In regions such as Andalusia and Madrid, this tax has been abolished in practice by a bonus of 100%.  
• Duty to declare: Residents are required to declare their foreign assets (accounts, investments, real estate) via "Modelo 720" if the value per category exceeds €50,000.

Read more about tax residency in Spain.

The "Ley Beckham": A tax safe haven for your investments?

In addition to the standard regime, Spain offers a very attractive and optional tax regime for expats, commonly known as the "Ley Beckham" or the "régimen especial de impatriados". This regime is legally enshrined in Article 93 of the Spanish Personal Income Tax Law (IRPF).  

The core principle of the Ley Beckham is that, although the person is for all practical purposes a tax resident in Spain, for most of his income sources he is taxed as if he were a non-resident is. This has a crucial and particularly favourable consequence for the holder of an international investment portfolio. Under this regime, one is taxed only on income deemed to be of Spanish origin. While earned income is taxed worldwide (at a favourable flat rate), capital gains, dividends and interest arising from a foreign securities portfolio (for example, a portfolio held with a Belgian or Luxembourg bank) are considered non-Spanish income and are therefore fully exempt from Spanish income tax.  

The conditions for enjoying this regime are strict :  

1. During the five previous tax years have not been a tax resident in Spain.
2. The move to Spain must be due to specific, economically motivated reasons. The most common are entering into a employment contract with a Spanish employer, taking up a mandate as a driver in a Spanish company, or starting a qualified innovative economic activity. Mere retirement or retirement is not enough.
3. The formal application should be submitted through the Model 149 to the Spanish tax authorities within a strict expiry period of six months after the start of the activity in Spain (e.g. registration with social security).  

The regime is applicable for the year of arrival and the following five calendar years, representing a maximum duration of six years. After this period, one automatically falls back to the standard regime for residents.  

Opting for the Ley Beckham is not just a small advantage; it is the perfect tax counterpart to the Belgian exit tax. Whereas Belgian law taxes latent capital gains up to the day of emigration, the Ley Beckham ensures that capital gains accruing after the emigration (for up to six years) is not taxed in Spain. Together, these two, at first sight unrelated, national legislations create an (almost) seamless tax transition without double taxation on the same capital gain. The six-year period in Spain under this regime can be seen as a tax "free haven" for the further growth of the foreign investment portfolio.

Comparing Spanish tax regimes for a foreign securities portfolio

Feature	Standard Residential Regime	"Ley Beckham" Regime
Taxable base	Global income and wealth	Spanish source income only (exception for labour income)
Capital gains tax (foreign portfolio)	Yes, progressive rate from 19% to 28%	No, fully exempt
Taxation of dividends (foreign portfolio)	Yes, progressive rate from 19% to 28%	No, fully exempt
Wealth tax (foreign capital)	Yes (subject to regional variations)	No, fully exempt
Declaration of foreign assets (Modelo 720)	Yes, mandatory	No, exempt
Duration of regime	Unlimited (as long as one is a resident)	Maximum 6 years

Paradoxically, the most favourable tax route to Spain (Ley Beckham) is not available to the traditional "retiree" or "pensioner" who wishes to live passively off his assets. The regime requires an active economic link to Spain. Many clients dream of "quitting work" and moving to Spain. However, the tax reality is that such "passive" emigration inevitably places them under the much more expensive standard regime.

Read more about the Ley Beckham.

The double taxation treaty

In the interaction between two national tax laws, the double taxation convention (DTC) plays a crucial role. This treaty takes precedence over domestic legislation and aims to determine which of the two states has taxing jurisdiction, thus avoiding double taxation. The treaty between Belgium and Spain is based on the OECD model treaty.  

Analysis of Article 13 (Capital gains)

Article 13 of the DTC Belgium-Spain regulates the power to tax capital gains. For an investment portfolio, two provisions are of prime importance:

• The general rule (Art. 13, para. 6): This section states that the taxing power for capital gains on movable property (such as a securities portfolio) is assigned exclusively to the state where the transferor is tax resident at the time of disposal. Specifically, if you are resident in Spain at the time you sell your shares, in principle, only Spain may levy tax.  
• The exception (Art. 13, para. 5): However, the treaty contains a very important exception for "major shareholdings". This provision states that benefits from the disposal of shares forming part of a participation of at least 25% in a company resident in the other state (in this case Belgium), may be taxed in that other state (Belgium). This is a so-called "claw-back" clause that allows Belgium, even after your emigration, to still exercise taxing powers under strict conditions.  

Interaction between exit tax and treaty

Legally-technical, the exit tax is not a violation of the treaty, but rather a anticipation on it. Belgium levies tax on a notional realisation at the very last moment when it undisputedly has exclusive taxing power: the day before tax residence formally changes. The double tax treaty regulates the situation that arises after that moment. The exit tax is thus the price the emigrant pays to be allowed to transfer the taxing power over the future accrual of his assets to Spain.

After emigration, when the shares are effectively sold at a later date, the treaty takes effect in full:

• Scenario A: Ordinary portfolio (<25% holdings): Belgium has already claimed its share of the capital gain (up to emigration) through the exit tax. In the event of a subsequent genuine sale while you are resident in Spain, Section 13(6) allocates the taxing power exclusively to Spain. If you are subject to the Ley Beckham, Spain will not exercise this jurisdiction. The net result is that only the Belgian exit tax was paid on the capital gain until the move.
• Scenario B: Significant interest (≥25% in a Belgian company): Belgium has levied the exit tax on the latent capital gain on exit. However, on a subsequent, actual sale, Section 13(5) designates the taxing power also to Belgium. This creates a potential risk of double taxation: first through the notional exit tax, and then through a real tax on sale. In such a situation, to respect treaty rules, Belgium will have to set off the exit tax previously paid against the final tax due, but the procedure for doing so can be administratively complex.

The Article 13 analysis shows that an "investment portfolio" is not a homogeneous tax concept in an international context. The presence of a single "substantial interest" of 25% or more in the portfolio changes the entire international tax dynamics and risk profile of emigration. You may own a €10 million portfolio, of which €9 million in diversified funds and €1 million in a 30% interest in a Belgian SME. For tax purposes, these are two completely different worlds. For the €9 million, the analysis (Exit Tax -> Ley Beckham -> no Spanish tax) is relatively straightforward. For the €1 million stake, there is the additional risk of the treaty's "claw-back" clause , which requires much more complex planning, such as considering a sale or restructuring of that particular stake before emigration.

Strategic Considerations and Conclusions

The preceding analysis leads to a number of concrete scenarios and strategic recommendations for any Belgian investor considering emigration to Spain.

Scenario Analysis: practical implications

Scenario 1: The "Active Emigrant" (opts for Ley Beckham)

In Belgium: When leaving after 1 January 2026, the emigrant is subject to the two-year reporting requirement. If he sells assets within those two years, the capital gain (accrued since 31 December 2025) is taxable in Belgium.

In Spain (first 6 years): The emigrant pays no Spanish income tax or wealth tax on the foreign portfolio. All capital gains realised during this period are untaxed in Spain.

Conclusion: This is the most optimal tax scenario. The Belgian tax can be avoided by delaying the sale of assets until after the two-year period. In return, one gets six years of tax-free asset growth in Spain.

Scenario 2: The "Passive Emigrant" (falls under the standard regime)

In Belgium: The exit tax is payable in an identical manner.

In Spain: The emigrant is taxed on all globally realised capital gains at the progressive rates (19%-28%) and is potentially subject to wealth tax. A significant risk of double taxation arises here. If a sale takes place within the first two years, the capital gain is taxed in both Belgium (because of the exit tax regime) and Spain (because of the residency principle). Although the treaty provides mechanisms to correct this, the procedure is complex and the result is not always guaranteed.  

Conclusion: This scenario is considerably less favourable and requires much more careful and proactive planning to avoid double taxation, especially by avoiding sales within the first two years after emigration.

Conclusions and recommendations

The interaction between the new Belgian legislation, the Spanish tax regimes and the double taxation treaty is extremely complex. Successful emigration requires a strategic and well-prepared approach.

1. Timing is key: An emigration fully completed before 31 December 2025 completely avoids the application of the new capital gains tax and exit tax. For those leaving after this date, detailed planning is essential.
2. Appreciation is crucial: Regardless of emigration plans, it is of capital importance for every Belgian investor to have the entire portfolio, and in particular unlisted assets, professionally and documented, valued as of 31 December 2025. This valuation forms your new tax base and is the cornerstone of your defence against the taxman for decades to come.
3. Analyse your emigration profile: Whether you will be an "active" or "passive" emigrant is the most important factor in the success of your tax planning in Spain. The possibility of qualifying for the Ley Beckham should be central to your considerations. If necessary, adjust your professional plans to meet the requirements.
4. Segment your portfolio: Carefully identify any "significant shareholdings" (≥25% in a Belgian company). These assets require a separate, more specialised strategy due to the specific "claw-back" provisions in the double tax treaty.
5. Consult experts: The complexity of this file cannot be underestimated. A well-prepared emigration requires specialised legal and tax advice, not only in Belgium but also in Spain, to perfectly align both legislations.