Belgium does not recognise the concept of a “real estate rich company”. As a result, the transfer of shares in a company holding (only) real estate assets is not treated as a transfer of the underlying assets. From a purely tax perspective, the comparison between a share deal and an asset deal has therefore been favourable to taxpayers since the early 1960s.

Still, some have argued that anti‑abuse rules could allow the tax authorities to recharacterize a share deal into an asset deal. In February, the Antwerp Court of Appeal once again ruled against the tax authorities on this point.

General anti‑abuse rule (GAAR): the framework

Subject to some tax‑specific nuances, the GAAR allows the tax authorities to adjust the taxable base so that a transaction is taxed in line with the purpose of the law, as if the tax abuse had not occurred. To apply the GAAR, the tax authorities must demonstrate tax abuse, which has two components:

  • Objective element: the transaction goes against the purpose of a tax provision or the intention of the legislator, even though the chosen structure is legally valid.
  • Subjective element: the essential aim of the taxpayer is to obtain a tax advantage.

The GAAR was challenged before the Constitutional Court, notably on the basis of the legality of taxes and the division of tax powers between the Federal State and the Regions. The Court upheld the GAAR, but with an important clarification: it is only a rule of evidence, not a power to create or extend taxation. The tax authorities may only rely on it where the objectives of the relevant tax provision are sufficiently clear from the law and its preparatory works. They must also consider market practice and existing anti‑abuse rules. This significantly limits the scope for aggressive recharacterisations.

VAT and corporate income tax

In several cases, the tax authorities challenged the sale of so‑called “project companies” (Special Purpose Vehicles (SPVs)) holding a single real estate development. They argued that the capital gain on the shares should be recharacterised as remuneration for development services, subject to VAT and corporate income tax. The courts have consistently ruled in favour of taxpayers.

For example, the Antwerp Court of Appeal confirmed that:

  • the incorporate of the SPV was required to be awarded the project;
  • the share price was not determined by reference to development services;
  • the SPV had full legal personality and bore the project risks;
  • the use of project companies is standard market practice (facilitation and streamlining of permits, risk allocation, coordination);
  • the transfer of shares of the SPV is a common and economically normal transaction.

The courts also confirmed that tax abuse is not tax fraud, meaning that the ordinary statute of limitation applies. That said, these cases did not concern a recharacterisation into an asset deal, but rather an attempt to tax the capital gain as operating income.

Attention point for practice

Even if the GAAR does not apply, development services must still be remunerated at arm’s length to avoid transfer pricing issues.

Corporate income tax: sale and leaseback case

Another recent case before the Antwerp Tribunal of First Instance, and then the Court of Appeal, concerned a sale and leaseback transaction, preceded by a partial demerger. The real estate assets were separated from the operating activities (nursing and care homes). The shares of the real estate company were then sold, resulting in an exempt capital gain. The tax authorities challenged the exemption on anti‑abuse grounds. Once again, the courts ruled in favour of the taxpayer.

Key elements highlighted by the Court of Appeal included:

  • the transaction formed part of a broader group reorganisation;
  • the shareholder sought to raise funds to reinvest in the business (and did so);
  • the determination of the share price differed fundamentally from the pricing in an asset deal;
  • the continuity of renovation contracts was preserved;
  • the ownership of the real estate itself did not change;
  • the lease was concluded at market rent.

The Court also noted that:

  • the tax neutrality of the demerger was not challenged; and
  • share deals are common practice in the real estate sector.

These points directly reflect the safeguards imposed by the Constitutional Court.

Attention point for practice

Non‑tax reasons were carefully documented. This confirms the importance of justifying the transaction upfront (for example in board minutes), rather than reconstructing arguments later.

Real estate transfer tax (RETT)

To date, there is no published case law on the recharacterization of share deals for RETT purposes. This is hardly surprising. In our view, and in line with constitutional principles and the division of tax powers, the tax authorities do not have a sufficient legal basis to recharacterize a share deal into an asset deal for RETT purposes, even under the GAAR.

Sale of shares has not been a taxable event since the early 1960s. As a result:

  • the law does not define a taxpayer, tax base or tax rate for such a transaction; and
  • the power to tax share transfers has not been attributed to either the Federal State or the Regions.

Moreover, the GAAR is a procedural rule, not a delegation of taxing power. The Federal State therefore cannot recharacterise a share deal into an asset deal and then apply regional transfer taxes.

This position has also been acknowledged politically. The Federal Government Agreement of 12 February 2025 states that the Government “will support the Regions if they wish to fight against share deals with respect to real estate companies” , implicitly confirming that legislative changes would be required.

Conclusion and takeaways

Case law continues to favour taxpayers when it comes to attempts to recharacterize share deals into asset deals for corporate income tax and VAT purposes. In our view, such recharacterization is also not legally possible under current legislation for transfer taxes. That said, courts consistently focus on the absence of artificiality and on the taxpayer’s ability to demonstrate genuine non‑tax reasons.

Practical takeaway

Share deals remain a recognised and legitimate market practice, but they must be properly structured, priced, and documented, with clear business rationale from the outset.