DAC8 Transposition in Belgium: Compliance Requirements

Belgium's crypto-asset market operates within a complex regulatory environment shaped by the country's federal structure, its position as host to EU institutions, and its evolving approach to digital asset supervision. DAC8 transposition adds a new layer of obligation for CASPs operating in this market.

Regulatory Context

Belgium's approach to crypto-asset regulation has been cautious and incremental. The Financial Services and Markets Authority (FSMA) has issued warnings about crypto-asset risks and has taken action against unauthorized offerings, but Belgium was slower than some EU peers to establish a comprehensive registration framework for CASPs.

Since May 2023, CASPs operating in Belgium have been required to register with the FSMA under a national framework that anticipated MiCA. The registration process focuses on AML/CFT compliance, governance, and operational requirements.

The National Bank of Belgium (NBB) also plays a role in supervising certain financial institutions that offer crypto-related services, particularly banks and payment institutions.

Tax Treatment of Crypto-Assets

Belgium's tax treatment of crypto-assets for individuals is notably complex and has been the subject of significant debate. The Belgian tax authorities distinguish between three categories of crypto income: normal management of private assets (potentially tax-free for individuals), speculative gains (taxed at 33% as miscellaneous income), and professional income (taxed at progressive rates up to approximately 50%).

The determination of which category applies depends on the frequency, volume, and nature of the taxpayer's crypto activities — an inherently subjective assessment that has created uncertainty for both taxpayers and the administration.

DAC8 will provide the Service Public Fédéral Finances (SPF Finances — the Belgian Federal Public Service for Finance) with comprehensive data to assess individual taxpayers' crypto activity patterns and determine the appropriate tax treatment.

Transposition and Competent Authority

The SPF Finances, through its International Taxation division, will be responsible for transposing DAC8 into Belgian law and serving as the competent authority for receiving reports and exchanging information with other EU Member States.

Belgium typically transposes EU directives through royal decrees (arrêtés royaux) or parliamentary legislation, depending on the scope and nature of the obligations. Given Belgium's complex federal structure, coordination between federal and regional tax authorities may also be required.

Belgian TIN System

Belgium uses the National Register Number (Numéro de Registre National — NRN) as the primary identifier for individuals. For tax purposes, the NRN also serves as the TIN. For non-residents without an NRN, a separate identification number is assigned by the tax authorities.

For entities, the Enterprise Number (Numéro d'Entreprise) assigned by the Crossroads Bank for Enterprises (Banque-Carrefour des Entreprises — BCE) serves as the tax identifier.

Expected Penalties

Belgium's penalty framework for tax reporting violations includes administrative fines and potential criminal sanctions. Under existing provisions for CRS-related violations, penalties can include fines of up to €25,000 per infringement and additional penalties for systematic or deliberate non-compliance.

DAC8-specific penalties are expected to be at least as severe, reflecting the directive's importance in the EU's tax transparency framework and Belgium's general approach to tax enforcement.

Practical Implications

For CASPs registered with the FSMA, DAC8 compliance will require extending their existing AML due diligence to include tax-specific data collection, implementing the DAC8/CARF XML reporting format, managing the complexity of Belgium's multilingual environment (CASPs may need to communicate with users in French, Dutch, and German), and coordinating with both the FSMA and the SPF Finances on compliance matters.

Conclusion

Belgium's complex regulatory and tax landscape makes DAC8 compliance a multifaceted challenge. CASPs operating in Belgium should engage early with both the FSMA and the SPF Finances to understand the specific transposition requirements and prepare their compliance systems accordingly.