Undertakings for collective investment (UCI) funds (e.g. private equity funds)
UCIs and the Belgian tax on savings income
The Belgian tax on savings income is applicable in case of sale or redemption of shares of undertakings for collective investment - (UCI)/UCI in transferable securities (TS) - or in case of liquidation of a UCI(TS) with more than 10% (for shares of UCI and UCITS acquired since 1 January, 2018) or 25% (for shares of UCITS acquired before that date) of assets invested in debt-related assets. The percentage of the assets of the fund invested in debt-related assets is the so-called Asset Test. This tax only applies to Belgian resident individuals.
The investor will be taxed on the income on debt-related assets accumulated during the detention period. This amount is the Belgian Taxable Income per Share (BTIS), which reflects the accumulation of income on debt-related assets. The taxable basis will be equal to the difference between the Belgian Taxable Income per Share (BTIS) on the date of sale or redemption and on the date of acquisition.
Where the fund doesn't calculate any BTIS, the taxable basis will equal the capital gain earned by the investor, multiplied by the Asset Test.
If no Asset Test is available, the taxable basis will equal the full capital gain earned by the investor.
The necessity of the Asset Test calculation
As only UCI(TS) with more than 10% (for shares of UCI or UCITS acquired after 1 January, 2018) or 25% (for shares of UCITS acquired before 1 January, 2018) of their assets invested in debt-related assets are within the scope of the Belgian Tax on Savings Income, it’s crucial for any fund distributed on the Belgian market to be able to provide Belgian investors and distributors with accurate and up-to-date information regarding its Asset Test. The Asset Test is the only accurate information for determining if a UCI is within the scope of the Belgian tax on savings income.
In addition, the need to calculate the BTIS for a particular fund will depend on its Asset Test.
In case no BTIS calculated for a fund, the Asset Test is used to calculate the taxable amount.
The necessity of the Belgian taxable income per share (BTIS) calculation
The BTIS computes, upon each net asset value (NAV) calculation (so potentially on a daily basis), the share of the NAV consisting of income (unrealised and realised) from debt-related assets.
In case a BTIS is calculated for the fund, the taxable basis of the investor will be equal to the difference between the BTIS on the date of sale or redemption and on the date of acquisition.
How PwC’s Belgian Tax Fund Reporting Services can help streamline your Belgian Asset Test and BITS calculations
Our PwC Financial Services specialists have significant expertise in the processing and computation of Asset Tests of Private Equity funds. We make a point of adapting our methodology reactively as the Belgian tax landscape evolves.
The Asset Test computation of a private equity fund may be particularly challenging, as each fund has its specific design and characteristics. Additionally, the investment universe of private equity funds can be very complex.
We compute BTIS for private equity funds according to the calculation rhythm of of the fund’s NAV (daily, weekly, monthly, etc.), allowing you to receive the BTIS computation required by Belgian individual investors.
