In the context of the planned introduction of a capital gains tax on financial assets for gains realized as from 1 January 2026, financial institutions will, in certain cases, act as withholding agents for this tax. Given that the new legislation will enter into force with retroactive effect, we observe in practice that these institutions are currently contacting their clients to ask them to choose between an opt-in or opt-out system for the collection of this tax.
In order to keep the practical implementation feasible for both financial institutions and taxpayers, several transitional periods and deadlines have recently been relaxed through amendments, which are also discussed in this article.
The choice between an opt-in or opt-out determines whether the financial institution will automatically withhold the tax upon the realization of a capital gain, or whether the taxpayer will be responsible for declaring and paying the tax through their personal income tax return.
Opt-in: withholding at source
Under an opt-in, the financial institution will automatically withhold the capital gains tax when a taxable gain is realized, for example upon the sale of shares, funds or other financial instruments. In that case, the institution will calculate the realized gain, apply a 10% withholding and remit it to the tax authorities.
This withholding is, in principle, final: you do not need to include the relevant capital gains in your personal income tax return. However, this only applies if you do not wish to make use of the annual exemption of EUR 10,000 or the offsetting of capital losses. In such cases, a tax return is still required in order to reclaim any overpaid tax (see below).
In practice, this system may represent an administrative simplification, as the tax is in principle settled immediately via the financial institution. However, it is important to understand that a financial institution will not take into account any realized capital losses, nor the annual exemption of EUR 10,000.
If the taxpayer wishes to apply this exemption or offset capital losses, they will in practice still need to make adjustments via their personal income tax return. In that case, any excess tax withheld can subsequently be recovered through the tax return. Please note that it may take up to two years before the withheld capital gains tax is (partially) refunded by the tax authorities.
It is important to note that the mandatory withholding by financial institutions has been postponed to 1 June 2026. For gains realized during the first five months of the year (January through May), a specific regime applies: you may request the relevant financial institution to voluntarily apply a withholding equivalent to the tax. This allows you to avoid having to report these transactions later in your tax return. You have until 31 August 2026 to make this specific request.
Opt-out: self-reporting via the tax return
Under an opt-out, the capital gains tax is not withheld by the financial institution. The taxpayer then chooses to be responsible for correctly reporting the capital gain in their personal income tax return and for paying the tax due.
This system offers more flexibility. For instance, the taxpayer can immediately take into account the annual exemption of EUR 10,000 as well as any realized capital losses in their tax return.
If you are considering handling the tax yourself through the opt-out system, there are several points that require particular attention. First, the aspect of reporting and privacy: although no tax is withheld at source, in an opt-out scenario the financial institution is legally required to report your data to the tax authorities. The tax administration receives information about your identity, your chosen option and the total capital gains realized, meaning that the anonymity associated with the opt-in system no longer applies.
In addition, a strict unanimity rule applies to joint accounts. The opt-out can only be applied if all account holders agree. In the absence of a unanimous decision, the tax will still be withheld at source.
Following recent amendments to the draft legislation, you have been given more time to make this decision. The deadline to communicate your opt-out choice to your financial institution has been postponed from the end of June to 31 August 2026. This choice then applies retroactively to the entire 2026 income year and remains valid for subsequent years, unless revoked.
Which option should you choose?
This choice requires a careful assessment of your specific situation. The main factors to consider are:
• the extent to which the taxpayer wishes to benefit from the annual exemption and the offsetting of capital losses: under an opt-out, you can immediately apply the EUR 10,000 exemption and offset losses in your tax return, without having to wait for a refund;
• the preference for anonymity: under an opt-in, an anonymous settlement at source is possible and no further reporting in the personal income tax return is required;
• the agreement of co-account holders: the possibility/necessity of reaching a unanimous decision for joint accounts;
• cash flow: under an opt-out, the taxpayer retains more liquidity, as the tax is only settled through the personal income tax return. This may provide a temporary cash flow advantage, whereas under an opt-in the tax is withheld immediately at source.
As financial institutions are currently actively contacting clients to request their choice, it may be useful to assess this decision in advance. We closely monitor developments regarding the capital gains tax and are ready to assist you in making this choice. If you have any questions about the application of this new regime or would like to discuss which approach is most suitable for your specific situation, please feel free to contact us.
