SMEs Take Case to Constitutional Court Over Capital Gains Tax
July 2026 - Five Belgian companies are taking their case to the Constitutional Court to challenge a provision of the new capital gains tax. They are not objecting to the tax itself, but rather to the way the law defines who is considered an entrepreneur. According to the companies, this definition is too broad and does not sufficiently take into account the reality of growing SMEs.
The capital gains tax, which has been in effect since the beginning of this year, taxes profits from the sale of shares and other financial products. For small investors, the rate is 10 percent, with an annual exemption of 10,000 euros. A more favorable regime applies to shareholders with a so-called “significant interest.” Those who own at least 20 percent of the shares can count on lower rates for capital gains under 10 million euros and an exemption of 1 million euros over a five-year period.
Active entrepreneurs or passive investors
It is precisely that 20 percent threshold that is now under fire. According to the companies involved, the law does not distinguish sufficiently between active entrepreneurs and passive investors. A founder who falls below the 20 percent threshold as a result of a merger, acquisition, or funding round is no longer eligible for the preferential tax treatment. An investor who does hold 20 percent but is not operationally involved in the company, on the other hand, is eligible.
The proponents fear that this could discourage entrepreneurs from growing their businesses. Anyone who attracts external investors, transfers shares to employees, or opts for consolidation runs the risk of receiving less favorable tax treatment. This would be particularly problematic for SMEs, as growth often depends precisely on attracting partners, capital, and talent.
Reasonable and Proportionate?
In addition to the training company BlackBird, four other companies are joining the lawsuit. Among them are the delivery app OrderBilly and the IT company Easi, which are taking the case to the Court. Particularly among companies where employees are shareholders, there is concern that the employees involved will be treated for tax purposes as ordinary investors, even though they actively contribute to the company’s development.
The companies have retained tax law professor Mark Delanote to lead the case. Legally, the case centers on whether the 20 percent threshold is reasonable and proportionate. Critics argue that just because the threshold is objectively measurable does not automatically mean it is fair.
A ruling from the Constitutional Court is not expected until 2027. In the meantime, other legal proceedings against the capital gains tax are also underway, including those concerning its retroactive application, the role of foreign banks, and the calculation of taxable capital gains.
