NFT in Belgium: regulation and taxation
In many ways, cryptocurrencies and NFTs are still in the gray zone, or outside of legal regulation. Countries all around the world are now establishing the necessary legal framework. However, proper and equitable taxation of the NFT industry is frequently a challenge. This article contains further information about NFT taxes.
NFT taxation is inconsistent
The Belgian IPT administration regards NFT as a commodity, whilst Registration Duties, Estates, and VAT administration regard it as a piece of art. As a result, several tax regimes exist, creating issues for the common user.
Currently, NFT taxes will be applied in the case of a sale or inheritance. Indeed, by classifying NFTs as currency rather than art, the IPP stands for the subsequent capital gains. However, by classifying NFTs as a work of art (rather than money), the VAT administration may impose a VAT (21%).
Is an NFT token considered a piece of art?
Despite all the diverse thoughts, this is a controversial subject. Given the foregoing, an NFT token may be used to secure a piece of art, its description, author information, and (after alienation) buyer data. As a result, whether an NFT is a work of art in and of itself is determined by the information that is fixed in this form.
NFTs (non-fungible tokens) are certificates of digital property, based on blockchain technology. They certify the ownership of a work or a virtual item. Learn more about NFT by visiting the bit4you education section Academy.
NFT as a cryptocurrency income
When, on the other hand, the NFT is classified as a cryptocurrency, the individual seller will either be fully free from capital gains tax if he invested a long time. Otherwise, the individual will be taxed as other income (at a flat rate of 33%) on this capital gain in case of further selling, or as professional income at a progressive rate of up to 50%.
NFT as a heritage
Well, so far as the NFT profit is considered, what about the inherited NFT? Regardless of the nature of digital assets, according to Grégory Homans, managing director of Dekeyser & Associés, they should be disclosed in the property declaration. The truth is that as the crypto and NFT sectors get more regulated, so does the relationship between them and tax authorities. They will eventually learn about your NFTs since they are rigorously investigated during times of crisis.
Important to note that the European DAC 8 directive, which is anticipated to enter into force soon, would strengthen the automated exchange of information between tax authorities on digital assets, including NFTs. This guideline is part of the OECD’s Crypto Asset Reporting Framework (CARF), which was issued on October 10, 2022.
An NFT is more commonly considered as a piece of art. Even if the legal (and tax) object is equated with intangible movable property, it is hard to establish a definite decision between a digital token and intangible movable property.
Finally, the best way to proceed is to contact your lawyer or accountant. Furthermore, the laws of several countries differ in many aspects of the concept of NFT. We are optimistic that the matter will be resolved soon.
