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What exactly is changing with the capital gains tax?
Since 1 January 2026, the new capital gains tax applies to gains realised on financial assets. These include listed shares, funds, bonds and cryptoassets, but also unlisted shares in family businesses and SMEs. For entrepreneurs, the latter is particularly important.
If at some point you sell or transfer shares in your business for consideration, the resulting capital gain will be assessed. This gain is calculated as the difference between the value of your shares at the relevant starting date and the eventual sale price.
For shares already owned before 1 January 2026, an important principle applies: in principle, the historic gain accrued up to and including 31 December 2025 remains outside the scope of the tax. This is why the valuation date of 31 December 2025 is so important. The value of your business on that date serves as the reference point for the future tax calculation.
You have until 31 December 2027 to have a formal certified valuation report drawn up. However, postponing is not a good idea. Demand for valuations is likely to increase significantly in the coming months, reducing the availability of professionals such as property valuers.
How much is the capital gains tax?
The standard capital gains tax rate is 10%. An annual exemption of €10,000 applies per taxpayer and is indexed each year. If this exemption is not fully used, up to €1,000 per year can be carried forward for a period of five years, up to a maximum amount of €15,000. For married couples subject to a community property regime, the combined exemption can therefore amount to as much as €30,000 (indexed).
Shareholders with a substantial shareholding are subject to a different regime. If you own at least 20% of a company's share capital at the time of sale, a capital gain of up to €1 million is tax exempt. This exemption can be used again every five years. Any gain above that threshold is subject to progressive tax rates ranging from 1.25% to 10%.
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Why is the valuation date of 31 December 2025 so crucial?
Many entrepreneurs will be thinking: “I’m not planning to sell my business any time soon” but that is precisely where the risk lies. The value that will later serve as the basis for calculating capital gains tax was already determined on 31 December 2025, even if you don’t sell your business for another five, ten or fifteen years.
The challenge is that this valuation date must be properly documented and it is in your best interest to make sure the most appropriate option is selected. This may be based on a recent transaction prior to the valuation date, a contractual valuation, the statutory formula, or an economic valuation prepared by a certified accountant or statutory auditor.
Why the tax authority’s standard valuation method can sometimes lead to an unfavourable outcome
The standard valuation method uses a simple formula: (4 × EBITDA) + equity
This may seem objective and straightforward, but for many businesses this formula is too limited. It doesn’t take full account of the economic reality or the elements that actually make a company valuable. For example, businesses with:
a broad customer portfolio;
high recurring revenue;
a strong market position;
significant know-how;
growth potential;
real estate assets;
or considerable future cash flows.
All these factors can mean that a company is economically worth far more than what is reflected by the tax formula.
The result? A lower valuation at the reference date results in a higher taxable capital gain on a later sale. In other words, you may end up paying more tax than necessary simply because the value as at 31 December 2025 was not properly substantiated.
A concrete example of how the taxable capital gain is determined
A practical example will illustrate the difference.
Suppose you sell your business in 2028 for €4,000,000.
Scenario 1: standard valuation method
The tax authorities determine the value of your company as at 31 December 2025 using the formula:
value according to standard valuation method: €2,200,000
sale price in 2028: €4,000,000
taxable capital gain: €1,800,000
taxation depending on shareholding percentage
Scenario 2: economic valuation
An independent certified accountant prepares a substantiated economic valuation taking into account, among other things, profitability, recurring income, growth prospects, customer portfolio, market position and future cash flows.
value according to economic valuation: €3,100,000
sale price in 2028: €4,000,000
taxable capital gain: €900,000
taxation depending on shareholding percentage
This clearly shows why a correct valuation today can have a major impact on your future tax burden.
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Why an economic valuation is more than a tax exercise
Many entrepreneurs look at a valuation purely from the perspective of capital gains tax. In practice, however, a valuation often plays a much broader role. A substantiated economic valuation provides clarity about:
the actual value of your business;
your future sale scenarios;
family transfers and strategies around family continuity;
succession planning;
buyout scenarios between shareholders;
or the allocation between children.
Especially in family businesses, a correct valuation at a time when no dispute exits (in ‘tempore non suspecto’) can help avoid discussions and tensions later on. Once assets need to be divided, the same question often crops up: what is the business actually worth?
Obtaining an objective and well-founded answer to this question today avoids a great deal of uncertainty at a later stage. This is another reason not to wait until a concrete sale or transfer is on the table.
When is the time to get a valuation?
That is perhaps the most important question of all. Many entrepreneurs think this is not an urgent matter as the 31 December 2027 deadline leaves plenty of time to have a formal valuation report prepared.
However, waiting is rarely a good idea. A high-quality valuation takes time. Figures need to be collected, analyses carried out and valuation methods must be properly substantiated.
The earlier you start, the more solid your file will be. Don’t wait until it is too late to contact our experts. We are happy to assist you.
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