On 2 April 2026, the Belgian Parliament adopted a general capital gains tax (“CGT”) on financial assets, closing a debate that had run for over a year. The regime applies retroactively from 1 January 2026 and, on paper, targets individuals rather than companies. In practice, it reshapes how private equity deals are priced, structured and negotiated – from management rollovers and earn-outs to reinvestment vehicles and cross-border exits.
I. The basics
The CGT applies only to Belgian tax-resident individuals and certain non-profit entities; companies subject to corporate income tax fall outside its scope. It covers a broad range of financial instruments; listed and unlisted shares, bonds, ETFs, crypto-assets, certain insurance products and derivatives, but only transfers for consideration, such as sales. Gifts and inheritances are excluded.
Three regimes matter in practice. A general rate of 10% applies to most gains, with a modest annual exemption of €10,000. Substantial shareholdings (i.e. direct participations of at least 20%) benefit from progressive rates between 1.25% and 10%, together with a €1,000,000 exemption spread over five years. So-called “internal capital gains”, arising when shares are transferred to a company the seller controls alone or together with close family, are taxed separately at 33%. A step-up mechanism means only gains accrued since 1 January 2026 are taxed, with the value on 31 December 2025 serving as the baseline, and a FIFO rule determines which shares are deemed sold first.
II. Why it matters for private equity
PE funds and portfolio companies, as corporate vehicles, sit outside the CGT’s scope. But the tax reaches every individual in the deal chain: founders and family shareholders on exit, management and co-investors rolling over into the acquisition vehicle, and private clients allocating capital to funds or co-investments. Because the tax attaches to the seller’s personal position rather than the deal vehicle, it has become a genuine structuring parameter, alongside price, warranties and governance, rather than an afterthought.
III. Five flashpoints for PE deals
A. Dilution and the 20% threshold
Entrepreneurs who bring in PE capital risk slipping below the 20% substantial-shareholding threshold as a result of a capital increase or restructuring. Losing that status forfeits both the progressive rates and the €1,000,000 exemption; the residual stake then falls back to the general regime’s €10,000 exemption and flat 10% rate. This matters most where a seller reinvests through a limited rollover into the acquiring holding: if that stake stays under 20%, a later exit can be taxed materially harder than expected. Tracking the exact percentage becomes as important to the negotiation as the price itself.
B. Earn-outs: when is the gain taxed?
Earn-outs are common where sellers stay on board after closing to protect continuity, and their treatment under the CGT was unclear until the Finance Minister clarified two points during the parliamentary debate. Earn-outs linked to a sale completed before 1 January 2026 but paid afterwards remain under the old regime. For sales from 1 January 2026 onward, the earn-out gain is only treated as realised once the underlying conditions are actually met, and it is the original shareholding percentage, not the percentage at payment date, that determines whether the substantial-shareholding regime applies. Whether successive payments must be aggregated into one taxable gain or taxed year by year is still open, which leaves real planning uncertainty in deal documentation.
C. Rollovers and the “internal capital gains” risk
The 33% internal-gains rate targets sellers who transfer shares to a company they control, alone or with close family, converting what would otherwise be dividend income into a lower-taxed gain. Because PE rollovers often leave the seller with governance or veto rights in the acquisition vehicle, it was unclear whether joint control with a financial sponsor could trigger this higher rate. The Minister confirmed a narrow reading: the control required can only exist “alone” or “together with close family”, so joint control with a third party such as a PE sponsor does not qualify. Control must also exist at the moment of transfer. Control arising only afterwards, for example through a later reinvestment, falls outside the internal-gains regime, subject always to the general anti-abuse rule. That leaves standard structures, such as minority buy-outs with a rollover, joint-control arrangements with a fund, under the more favourable substantial-shareholding or general regime, though arrangements that are economically hard to justify remain exposed to challenge.
D. The 31 December 2025 valuation snapshot
For unlisted shares acquired before 2026, the taxable gain is measured against the value on 31 December 2025 – the statutory reference date. The law allows several valuation anchors (2025 third-party transactions, capital-increase values, independent contractual formulas, or a default formula based on equity plus a 4x EBITDA multiple), and a formal valuation by a statutory auditor or independent accountant remains possible until the end of 2027. For companies with limited or negative EBITDA, high multiples, or real-estate-heavy balance sheets, the default formula can understate the true baseline significantly. Vendor-side planning should test early whether an independent valuation is worth obtaining before that window closes.
E. Cross-border mobility
Emigration is treated as a taxable transfer, which can crystallise latent gains on shares at the moment a shareholder leaves Belgium. A two-year automatic deferral is available in some cases, but the outcome depends on the destination country, the timing of any later sale, and whether the individual returns to Belgium within that two-year window. This is relevant not only for founders and family shareholders but for management shareholders and co-investors who relocate mid-hold.
IV. Reinvesting after an exit
Family offices and private investors redeploying exit proceeds into private equity should look closely at the vehicle they use. Classic PE funds fall fully within the new CGT. A (private) “privak” can be more favourable: the gains it distributes are typically structured as dividends, which benefit from a withholding tax exemption under separate legislation, potentially producing a materially lower effective rate than a standard fund structure. Co-investments and direct participations raise the same general-regime-versus-substantial-shareholding questions as any other deal, and the 20% threshold and future dilution should be modelled from the outset. Fund documentation, distribution mechanics and the investor’s own tax position all need to be checked together. Therefore; Tracking the exact percentage of a rollover has become as material to a private equity deal as the price itself.
V. Practical takeaways
- Model the 20% threshold before agreeing on any rollover, capital increase or new investment round – dilution below that line changes the tax outcome of a future exit.
- Build earn-out and rollover mechanics into the deal documentation with the CGT timing rules in mind, given the open question on aggregating successive payments.
- Keep governance and control arrangements under review so that reinvestment structures stay clearly outside the “internal capital gains” regime.
- Consider an independent valuation as at 31 December 2025 where the statutory default formula is unlikely to reflect the company’s true value.
- Factor emigration and cross-border scenarios into exit planning for founders, management and co-investors who may relocate.
- Review the legal form used to reinvest exit proceeds – fund, private privak or direct co-investment – before committing capital.
The new CGT is conceptually simple – a tax on gains – but its interaction with the mechanics that define private equity deals, from rollovers and dilution to earn-outs, pre-closing reorganisations and multiple exit routes, is not. Building the tax analysis into deal structuring from day one, rather than retrofitting it at signing, remains the safest way to avoid surprises.
Should you have questions on how the new CGT affects a specific transaction or investment, please do not hesitate to contact our Tax or Private Equity teams.
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This newsletter does not constitute legal advice or a legal opinion. Please consult with a legal counsel before taking any action based on the information provided.