Before the bell: Belgian Capital Gains Tax by Year-End

Reynders tax to be scrapped, but caution still needed. X-Fab lifts Melexis. Alphabet reports stellar numbers.

European stock markets posted modest gains, while Wall Street traded in a buoyant mood with index increases of 2% or more. The prevailing view is: “If the economy weakens, the Federal Reserve will cut rates.” Just as investors have become accustomed to central banks stepping in, Belgian investors are equally used to the state offering up a tax in return. According to the new draft proposal from Flemish Minister-President Jan Jambon, a 10% capital gains tax on virtually all investments will take effect on 31 December 2025. The value of each investment will be fixed on that date to determine later capital gains. If the purchase price was higher than the year-end value, that higher price will be used instead. There’s also some good news: Jambon wants an exemption for gains realized after ten years, although the socialist party Vooruit opposes that. Likely to disappear: the so-called Reynders tax—a 30% tax on funds holding fixed-income securities. Tip: if you own such funds, consider waiting to sell, as the tax likely remains in effect through the end of this year.

Asian markets are trending higher this morning. The Hang Seng Index in Hong Kong is up 1.1%, and Japan’s Topix has gained 1.4%. Fridays are usually quieter for earnings, but today we’ll get results from Safran and IMCD. The latter is a major competitor to Belgian firm Azelis, whose shares fell 15% yesterday on weak—but far from catastrophic—results. In Brussels, results are expected from three REITs: WDP, Cofinimmo, and Xior, as well as from telecom operator Orange.

Belgian chips in demand

On Thursday evening, we discussed the Q1 results of X-Fab. The stock jumped 13.2% after orders in the first quarter surged 23% versus the previous quarter. The comparison to last year’s very strong Q1 still shows a decline, but the trend is clearly improving. The chip foundry—65% of whose revenue comes from automotive semiconductors—maintains its full-year guidance. Importantly, X-Fab clarified that import tariffs have no direct effect on the company since customers bear full responsibility once production is completed. This includes its largest customer, Melexis, whose shares gained 7.3% in X-Fab’s slipstream.

No signs of weakness at Google

Alphabet posted strong Q1 earnings after the bell. Revenue rose 12% to 90.23 billion dollar, exceeding the expected 10.8% growth. Operating profit came in at 30.6 billion dollar, also beating forecasts of 28.73 billion dollar. Google Search alone generated 50.7 billion dollar in revenue. Cloud revenue came in just shy of expectations, but there are still no signs of a meaningful slowdown in ad revenue or an existential threat to the search business. Alphabet continues to face monopoly lawsuits, but with the stock trading at 20 times trailing earnings, that risk seems largely priced in.

Did you know…

Self-employed Belgians typically only contribute to their pension savings (known as the “Vrij Aanvullend Pensioen voor Zelfstandigen,” or VAPZ) for 15 years? That’s far too late to harness the power of compound interest effectively.

This article was translated from Dutch and was originally published on Spaarvarkens.be.