In a context of persistently low real interest rates and monetary erosion, some executives are considering allocating part of their company’s excess cash to cryptocurrencies. This strategy, which is still marginal, nevertheless warrants rigorous analysis from a tax, accounting and governance perspective.
Potential advantages
The first advantage lies in the diversification of cash assets. Cryptocurrencies, particularly the most established assets, can constitute an asset class that is uncorrelated with traditional financial markets. For a company with a structural cash surplus, this diversification can help improve overall long-term returns.
From a tax perspective, the situation for Belgian companies is clear and predictable. Unlike individuals, a company can never be taxed on ‘miscellaneous income’. Capital gains realised on cryptocurrencies are part of taxable income and are subject to corporation tax at a rate of 25% (or 20% on the first €100,000 under SME conditions).
Furthermore, costs directly related to the management of these assets (consultancy, IT security, custody, auditing) are in principle deductible, provided that they meet the general conditions for deductibility and are part of normal cash management.
Disadvantages and points to consider
The main risk remains the high volatility of cryptocurrencies. A company must be able to justify that the amounts invested do not compromise its short-term liquidity or its ability to meet its operational commitments. Excessive allocation could be considered incompatible with prudent cash management.
From an accounting perspective, the classification of cryptocurrencies (intangible assets or cash investments) is crucial. It influences the treatment of impairment losses, the recognition of unrealised losses and the presentation of the annual accounts. A clear and documented accounting policy is essential.
Another point of attention concerns governance. Active management, comparable to intensive trading, could raise questions about consistency with the corporate purpose and the risk profile accepted by the management bodies. Even if this does not change the tax rate, it may have implications for the liability of managers.
Finally, the regulatory framework remains in flux. Future Belgian tax reforms are mainly aimed at individuals, but constant vigilance is required, particularly with regard to transparency, anti-money laundering and the traceability of transactions.
