Yield farming tax in Belgium

Yield farming promises you 8%, 12% or even 25% APY on your crypto. Sounds great, but what is left after the Belgian tax authorities take their share? The short answer: in Belgium yield is usually movable (investment) income (30% withholding tax on movable income), and since the capital gains tax was approved by the Chamber on 3 April 2026 a second taxable moment is added at exit.

In this guide we explain how Cryptotax handles yield farming on Aave, Curve, Pendle, GMX and related protocols, which FOD Financiën (the Belgian tax authority) codes you need to fill in, and how to handle the transition to 2026 correctly for tax purposes. We use concrete figures, not vague principles.

🌱 What is yield farming, concretely?

Yield farming is an umbrella term for all strategies where you put crypto to work in a DeFi protocol to generate a return. The form varies, but the pattern is always the same: you deposit tokens, the protocol logic puts them to work, and you receive rewards in the form of interest, fees or new tokens.

The common flavours we see in Belgian wallets:

• Lending on Aave, Compound and Morpho: you lend out stablecoins or ETH, other users pay interest, you receive aTokens or cTokens that grow along.
• LP rewards on Curve, Uniswap or Balancer: on top of trading fees you often get a second layer (CRV, BAL) as an incentive for providing liquidity.
• Vaults on Beefy, Yearn or Mamo: an autocompounder reinvests rewards for you, so the yield builds up without you having to claim manually each time.
• Yield protocols such as Pendle: you split future yield into tradeable PT and YT tokens, with a fixed or variable return.
• Perp DEX LPs such as GMX or GLP: you stand as a liquidity provider opposite traders and are compensated with a mix of trading fees and token emissions.

What ties all these constructions together for tax purposes: value periodically flows into your wallet (or accumulates inside a receipt token), without you selling anything. That periodic accrual is exactly where the Belgian tax authorities raise an eyebrow.

📋 Belgian tax qualification

The tax authorities split yield farming into two separate taxable moments: the yield itself (the stream of rewards) and the possible capital gain on the underlying crypto when you sell. The two live under different regimes and must be declared separately in your tax return.

The line between movable and miscellaneous is not a sharp boundary but a sliding scale. Cryptotax applies a pragmatic interpretation in line with the practice of the Advance Tax Rulings Office (DVB): passive, predictable yield from one or two well-known protocols (think of USDC on Aave generating 4%) leans towards movable income, with code 1444-11 on the tax return. Active farming with frequent rebalancing, leverage, regular pool hops and participation in many smaller protocols shifts towards miscellaneous income or even professional income.

The revised DVB questionnaire of April 2026 asks explicitly about the number of DeFi protocols you are active in and the degree of automation. Someone in ten different farms with automated reallocations has a harder time staying within normal management of private wealth than someone who simply leaves USDC on Aave.

Important: yield always remains taxable as income, regardless of the amount. There is no exemption threshold for movable income from crypto, as there is for savings accounts. Every euro you earn through lending or farming goes on the tax return.

🧮 Example 1: stablecoin lending on Aave

Suppose: you deposit 5.000 USDC into the Aave V3 USDC pool on Ethereum in January 2026, at an APY of 8%. You leave the position in place all year and withdraw everything at the end of December.

What happens for tax purposes?

• You do not receive rewards in a separate transaction. The interest accumulates in the aUSDC token: you get 5.000 aUSDC at deposit, and by the end of December that balance has grown to roughly 5.400 aUSDC.
• The interest of €400 (we take 1 USDC ≈ €1 for simplicity) is movable income.
• There is no Belgian intermediary withholding tax on movable income, so you declare it yourself: code 1444-11 in Box VII of the personal income tax return (movable income without withholding tax).
• Result: €400 × 30% = €120 tax.

The underlying 5.000 USDC itself? No capital gain is realised on it as long as you stay in USDC (its value is stable around the euro). If you had converted the USDC into, for example, ETH, the capital gain on that ETH would be separately taxable under the 10% regime. For stablecoin-specific nuance, see stablecoin yield in Belgium.

Cryptotax records this automatically: every growth in the aUSDC balance is recognised as yield income and flagged for code 1444-11 in your report.

🧮 Example 2: LP rewards on Curve

A more complex case. In March 2026 you deposit 10.000 USDC + 10.000 USDT into the Curve 3pool and receive LP tokens. Curve gives you two return layers: the trading fees (in the pool itself) and CRV rewards when you stake the LP tokens in the Curve gauge.

Over twelve months the following happens:

• Trading fees add roughly €300 of value to your position (settled at withdraw).
• You claim 500 CRV as a gauge reward. At each claim CRV has a certain market value. Suppose: an average of €0,40 per claim moment, so €200 in CRV rewards.
• In December you sell the 500 CRV for a total of €260 (the CRV price has risen).
• After that you withdraw the LP position: you get 20.300 USDC equivalent back (€300 trading fees settled).

For tax purposes that gives three different taxable moments:

1. Trading fees (€300): movable income, code 1444-11, 30% withholding tax = €90 tax.
2. CRV rewards at claim (€200): movable income at the moment of receipt, code 1444-11, 30% withholding tax = €60 tax.
3. Capital gain on CRV (€260 - €200 = €60): capital gain on a financial asset, falls under the 2026 regime. Under the €10.000 exemption unless you book other crypto profits that year.

Mind the timing: rewards are taxed at receipt at the market value of that moment, not at sale. If CRV later drops in value, you still pay tax on the original €200, and the loss from the drop is not deductible from that movable-income tax. It only sits in your cost basis for the eventual capital gain or loss at sale.

📅 Pre-2026 versus post-2026: what changes for yield farmers?

The tax logic for yield farming itself has not fundamentally changed because of the April 2026 capital gains tax. Yield remains yield: a periodic income stream taxed as movable or miscellaneous income. What does change is the regime for the underlying crypto when you sell.

Before 2026 the average DeFi user was in a peculiar position: the yield component was clearly taxed (movable or miscellaneous), but the capital gain on the sale of ETH, BTC or altcoins was usually untaxed under normal management of private wealth, unless you fell under miscellaneous income or professional income. Many active farmers drifted in that latter direction without realising it.

From 1 January 2026 anyone staying within normal management gets a clearer regime: 10% capital gains tax above the €10.000 annual exemption, with a step-up to market value on 31 December 2025 for pre-2026 holdings. For someone who generated yield throughout 2025 on an ETH position that had risen 3x in dollar terms, this means only the increase in value from 1 January 2026 falls under the 10%. The pre-2026 gain is fiscally "forgiven" via the step-up.

For the yield stream itself nothing changes: every euro you earn during 2026 through Aave, Curve, Pendle or vaults remains fully taxable as income from the first euro, without an exemption threshold. The new €10.000 limit applies only to the capital gain component, not to the income.

⚠️ Impermanent loss, leverage and the tax authorities

Three related pitfalls we often see:

Impermanent loss is not separately deductible. As explained in liquidity pool tax: the difference between buy-and-hold and the LP result is automatically settled in your exit value. You cannot deduct a "fictitious missed profit" from your yield income. Those who fall under professional income do have broader cost deduction, but that is a different regime with different consequences.

Leverage makes your position more vulnerable for tax purposes. Yield farming with borrowed crypto (for example a looping strategy on Aave: borrow, restake, borrow again) is seen by the DVB as a strong indicator of speculative behaviour. For those who wanted to stay within normal management pre-2026, that was a red flag. From 2026 the emphasis shifts: your crypto capital gain falls under 10% or 33% depending on the same criterion.

Auto-compounders hide taxable moments. A vault that reinvests rewards every day produces daily taxable yield events, even though you see no separate transactions in your wallet. Cryptotax reads receipt tokens and reconstructs that yield curve, so you have a correct annual value for your tax return. Calculating manually is not feasible for most users.

🛠️ How Cryptotax records it

For each yield strategy Cryptotax creates a separate continuity line (position), linked to the protocol and the pool. That gives you, per position, insight into:

• Deposits and withdrawals: with FIFO cost basis per deposited token. See how this works in FIFO explained.
• Yield events: each claim or receipt-token growth is flagged as movable or miscellaneous income, with the market value at claim time.
• Realised gain at exit: cost basis of the position vs. proceeds at withdraw, so the capital gain component is visible for the 2026 tax return.

In the annual report you find a total per category: how much movable income (codes 1444-11), how much miscellaneous income (code 1200-49) and how much capital gain under the 2026 regime. For accountants there is an audit-ready export per position, so you can trace every euro on the tax return back to an on-chain transaction.

Supported protocols for yield farming include Aave V2/V3, Compound V2/V3, Morpho Blue, Beefy Vaults, Curve, Uniswap V2/V3, and Balancer.

❓ FAQ

Is yield farming always taxed as movable income?
Not necessarily. Passive, predictable yield from one or two established protocols leans towards movable income (30% withholding tax, code 1444-11). Active farming with leverage, frequent pool hopping and participation in many different protocols tips towards miscellaneous income (33%) or professional income. Cryptotax classifies per position, but the final decision lies with you and your tax adviser.

Which FOD code do I use on the tax return?
For movable income without withholding tax (the common situation with DeFi yield) that is code 1444-11 in Box VII. For miscellaneous income that is code 1200-49 in Box XV. The capital gain component from 2026 goes in Box VIII. Cryptotax generates a total amount per category that you can transfer.

Are auto-compounder vaults on Beefy or Yearn taxed differently?
No, the tax qualification is identical: the yield the vault generates is taxable income at the moment it is built up in the receipt token. The fact that you do not make a manual claim does not change the taxable event. Cryptotax reads the receipt-token growth and recomputes the yield stream day by day.

What about the capital gains tax from 2026?
The law was approved on 3 April 2026 by the Chamber of Representatives, retroactively from 1 January 2026. Concretely: when you sell crypto you have built up through yield farming (or the underlying basis), the capital gain falls under the 10% regime above the €10.000 exemption. The cost basis for pre-2026 holdings is the market value on 31 December 2025 (step-up). Yield itself remains under the movable-income regime, with no step-up on it.

Is impermanent loss deductible from my yield income?
No. Impermanent loss is not a separately deductible loss in Belgium. The difference is settled in the exit value of your LP position and thus only affects the capital gain calculation, not your taxable income from fees or rewards.

How do I declare USDC yield on Aave or Compound?
The interest you earn is movable income, code 1444-11. Calculate the difference between your aUSDC or cUSDC balance at the start and end of the year (in euros), or let Cryptotax do that automatically. On the net amount you pay 30% withholding tax on movable income.

Do I have to put every yield claim separately in my tax return?
No, you declare a total amount per category. You do, however, need to be able to justify the underlying detailed calculation in case of an audit. Cryptotax keeps, per yield event, the date, market value and source, ready for audit purposes.

✅ Try Cryptotax for free

Want to know how much movable income (and soon capital gain) your yield farming activity produces under the Belgian rules? Connect your wallets and view your yield streams for free, classified per protocol and ready for code 1444-11. Accountants can share client reports and generate audit-ready exports via the partner programme.

⚠️ Disclaimer: This article is purely informational and not individual tax advice. The qualification of yield farming depends heavily on your personal situation (frequency, complexity, leverage, total crypto activity). For concrete files: consult a recognised Belgian tax adviser or request a ruling from the Advance Tax Rulings Office.