Individuals – Personal income tax

During the night of 9-10 July, the Chamber of Representatives adopted the draft law reforming the personal income tax regime.

The law introduces changes that are favourable to workers and entrepreneurs, whether acting as self‑employed individuals or through management companies, alongside a series of reductions and limitations for other taxpayers. It also contains provisions that will demand attention from employers and self-employed entrepreneurs that organised their professional activities via a personal services company.

Key changes to the personal income tax regime

•   The exempt amount will increase gradually over five years. The King will be empowered to adjust this amount so that, after indexation, it reaches €14,450 for assessment year 2030 and €15,600 for assessment year 2031. 

•   The supplements to the tax-free allowance for one or two dependent children will be gradually increased over assessment years 2027 to 2030. 

•   The tax reduction for unemployment benefits will be abolished from assessment year 2030. A transitional regime will apply for genuinely single parents with a dependent child.

•   The tax reduction for pensions will be phased out gradually.

•   The marital quotient (quotient conjugal / huwelijksquotiënt) will be gradually phased out.

•   The living wage (leefloon / revenue d’intégration) will, as a matter of principle, be taxable as replacement income. 

•   Pensioners who wish to earn additional income will be subject to a separate 33% levy on remunerations paid or attributed from 1 January 2027.

•   Private transactions that yield no more than €2,000 will be subject to an irrebuttable presumption of normal management of private assets.

•   The special social security contribution will become ‘single proof’. It will be calculated on an individual basis instead of per household, and reduced for taxpayers taxed individually. The income threshold will be increased, while the percentage applicable to the first bracket will be reduced.

•   The tax‑related employment bonus (werkbonus / bonus à l’emploi) will be increased to support the lowest wages. 

For entrepreneurs acting as natural persons or organised via a company, the law introduces:

•   A specific entrepreneurial deduction for self‑employed persons without a company. This is a deduction equal to 10% of profits (bénéfices / winst) or gains (profits / baten) after deducting professional expenses and losses. The maximum deduction will be €311 for assessment year 2028 and €415 for assessment year 2030. Certain types of income are excluded. These include income taxed at a separate rate, indemnities compensating in whole or in part a temporary loss of profits or gains, directors’ attendance fees (jetons de présence), and profits or gains from activities carried out as an ‘assisting spouse/helper’ (aidant), among others.

•   The abolition of the surcharge for insufficient advance tax payments for self‑employed natural persons.

•   An increase in the minimum company director’s remuneration to €50,000. The minimum remuneration will be subject to annual indexation. These changes enter into force on the day of publication of the law in the Belgian Official Gazette and apply from assessment year 2027.  

•   A limitation of lump‑sum benefits in kind to 20% of gross salary (see below). 

•   The extension of the copyright royalty’s regime to the IT sector (see below).

From an employer’s perspective, the following amendments will apply:

•   Increase in tax‑free voluntary overtime. A permanent regime will allow a maximum of 240 voluntary overtime hours to be exempt from tax. This regime enters into force on 1 April 2026 and applies to hours worked from that date. If remuneration is paid for more voluntary overtime hours than can be exempted, the exemption will be allocated proportionally across those hours. The explanatory memorandum confirms that recovery hours (‘heures de relance’/‘relance-uren’, i.e. voluntary overtime worked from 1 January to 31 March 2026) together with voluntary overtime under the permanent regime may not exceed 240 hours in total. 

•   Limitation of lump‑sum benefits in kind to 20% of gross salary for employees (and company directors). Lump-sum benefits in kind granted to employees will be limited to 20% of annual gross remuneration, assessed at company level. If the total lump-sum benefits granted to employees exceed this threshold, the excess will be subject to a 7.5% specific contribution, treated as a disallowed expense. Benefits taxed at actual value and social benefits are excluded, but lump-sum benefits such as company cars, housing, heating/electricity and private use of IT devices fall within scope. A similar cap applies to company directors, but the sanction is different: companies risk losing the reduced 20% corporate tax rate rather than paying the 7.5% contribution. The measure applies from assessment year 2027 and enters into force upon publication in the Belgian Official Gazette. 

•   Extension of the copyright royalties regime to the IT sector.  Software will again fall within the scope of the Belgian copyright regime, allowing developers to benefit from the 15% movable income tax treatment where the relevant IP rights are transferred or licensed to a third party for qualifying uses. Copyright income remains capped at 30% of total remuneration, with an overall ceiling of €77,220 for 2026; any excess will be treated as salary. The flat-rate cost deduction will, however, only be available where the taxpayer holds a valid ordinary or plus attestation of work in the arts at the time of payment or attribution.

This new adopted law still needs to be published in the Official Gazette.

This Programme law introduces a wide range of fiscal, social, and economic measures, many of which will have an immediate and significant impact on businesses, employers, and individuals. Below is an overview of its key provisions for employers and individuals.

Limitation of flat-rate cost deduction for copyright income  

The flat-rate cost deduction for copyright and neighbouring rights income (50% on the first indexed €10,000 of income and 25% on the indexed portion between €10,000 and €20,000) is now restricted to income from activities for which the taxpayer holds a valid “ordinary” or “plus” attestation of work in the arts (kunstwerkattest /attestation de travail des arts), as defined in Article 12, §8 of the Royal Decree of 13 March 2023, at the time of payment or attribution. Taxpayers who hold a “starter” attestation of work in the arts (as referred to in Article 17 of this Royal Decree) will no longer benefit from the flat-rate deduction. The flat-rate deduction of 15% of the gross amount is likewise reserved for holders of an attestation of work in the arts: only income linked to recognised activities, i.e. activities falling within the scope of the attestation of work in the arts, will qualify for the flat-rate deduction. Anyone who does not hold such an attestation will no longer be entitled to claim any flat-rate deduction for expenses and will instead have to substantiate actual expenses if they wish to deduct them from the gross amount of their copyright income. This measure takes effect retroactively from 1 January 2026, although, for the purposes of withholding tax, it only applies to income paid or attributed from the tenth day after publication of the law. 

It should further be noted that the copyright regime remains subject to pending legislative developments. In particular, the draft law on personal income tax reform (Article 74 of the draft law) provides the re–inclusion of computer programmes (software) within the material scope of the copyright regime, through a modification of Article 17, §1, 5° of the Income Tax Code that includes programmes referred to in Article XI.294 of the Code of Economic Law. As this draft law has not yet been adopted, taxpayers deriving copyright income from software should be aware that the scope of the copyright tax regime may be broadened in the future, but these changes are not yet in force. The current programme law does not address this specific point and is limited to the conditions for applying the flat-rate cost deduction as described above. 

Liquidation reserves and VVPRbis 

Several significant changes are made to the liquidation reserve and VVPRbis regimes: 

VVPRbis: 

For cash contributions made on or before 31 December 2025 and after 31 December 2025, dividends distributed in the profit allocation for the third financial year following that of the contribution (and subsequent years) will be taxed at a rate of 18% rather than 15% if the distribution takes place after 1 June (if the law is still published in the Belgian Official Gazette in May) or after 1 July 2026 (if it is published in June). This means that, for dividends deriving from contributions made before 31 December 2025, the 15% rate will remain applicable if the distribution takes place before 1 June (if the law is still published in the Belgian Official Gazette in May) or 1 July 2026 (if it is published in June).  In this regard, given the tight timeline for publishing the law in May, we anticipate it will be released in June, with it taking effect on 1 July 2026. 

Liquidation reserve 

•   For reserves created after 30 December 2025, the reduced rate that currently applies after a 3-year waiting period is increased from 6.5% to 9.8%. This new rate applies to dividends paid or attributed from the tenth day following publication of the law. For reserves added on or before 30 December 2025, the 5% rate remains available for reserves held for more than 5 years and the 6,5 % rate for those held for 3 years. The amendment providing that the allocation to the liquidation reserve must have taken place before or after 30 December 2025 (rather than 31 December 2025) has the effect that all companies whose financial year coincides with the calendar year and that close their accounts on 31 December automatically fall within the scope of the new regime. 

•   Anti-abuse provision: the anti-abuse provision targets situations in which a liquidation reserve is distributed tax-free upon the dissolution of a company, while its business activities continue within another company. If the recipient of the payment becomes a director of that other within three years following the payment, the amounts received will be treated as a taxable dividend and taxed at the standard rate of 30% in the taxable period during which the recipient became a director of the other company for the first time. The taxpayer may provide evidence to the contrary and prove that the acts carried out were justified by reasons other than obtaining a tax advantage. Operations carried out before the law’s entry into force cannot, in principle, be subject to this general anti-abuse provision, since the taxpayer cannot contravene a law that has not yet been applied. Entry into force will occur on the first day of the month following the month of the publication of the law in the Official Gazette. 

•   Anti-abuse provision (change of financial year): any change to the closing date of a financial year made on or after 24 November 2025 that is not chiefly justified by reasons other than tax avoidance, will be disregarded for the purpose of determining when reserves were added to the liquidation reserve. This rule applies to dividends paid or attributed from the tenth day following publication of the law. 

 Withholding tax exemption — correction factor 

A new correction factor is introduced that will gradually reduce the amounts of professional withholding tax that employers can exempt from remitting to the Treasury under the existing withholding tax exemption schemes (e.g., for shift work, night work, R&D, overtime, athletes, etc.). The correction factors are set at: 

•   97% for remuneration paid between 1 January 2027 and 31 December 2027  

•   93.35% for remuneration paid between 1 January 2028 and 31 December 2028  
•   95.9% from 1 January 2029 onwards  

These percentages may be adjusted annually by Royal Decree deliberated in the Council of Ministers, no later than 31 December of the preceding year and no later than 31 December 2028. This measure enters into force on 1 January 2027. 

Night and shift work – withholding tax exemption 

The conditions for the withholding tax exemption for shift and night work are modified. The shift premium must increase remuneration by at least 2% per hour of shift work and must be laid down in a collective bargaining agreement (CBA), work regulations, or an employment contract. The night premium must increase remuneration by at least 12% per hour of night work and must likewise be stipulated in a CBA, work regulations, or an employment contract. These changes apply to remuneration paid or attributed from 1 June 2026. 

Occasional workers in the fruit & vegetable sector – withholding tax exemption 

A new withholding tax exemption is introduced for employers in the fruit & vegetable farming sector who hire occasional workers. The exemption amounts to €1.30 per hour for occasional workers, linked to the health index which will be adjusted annually. This measure replaces the provision annulled by the Constitutional Court (judgment no. 86/2025) and applies to hours worked from 1 January 2026. 

The law of 18 December 2025 providing various provisions has been published in the Official Gazette on 31 December 2025.

Employer perspective

From an employer perspective, the main changes are as follows: 

•  Meal Vouchers: The maximum employer contribution to electronic meal vouchers increases from 6.91 EUR to 8.91 EUR. 

•  Hybrid Company Cars: Besides the changes applicable to companies (see page Entities and companies), the definition of benefit in kind will be adapted to include ‘false hybrid cars’ as per the new standard. 

•  Expat Regime: An un-capped tax–free allowance within the 35% limit of the total annual gross remuneration is introduced (the EUR 90.000 cap is removed). The base salary for activities performed in Belgium must at least be 70.000 EUR to be eligible. Changes will take effect retroactively from 1 January 2025. The amendments also introduce important transitional provisions. They apply retroactively to individuals commencing employment in Belgium from 1 January 2025, particularly those with gross salaries between EUR 70,000 and EUR 75,000, subject to other qualifying conditions. A dedicated catch-up window allows late applications within three months from the 10th day following the law’s publication in the Official Gazette.  

General income tax

From a general income tax perspective, the new measures focus on several key areas: 

•  Hybrid Cars: Starting 1 January 2026, self-employed individuals will face full non-deductibility of fuel costs for hybrid cars acquired, leased or rented from that date. However, hybrid cars obtained between 1 July 2023 and 31 December 2025 will enjoy a transitional regime, allowing up to 75% deductibility based on CO2 emissions, for the duration of the car ownership by the same self-employed individual. Cars emitting a maximum of 50 gr CO2 can benefit from higher deductibility (but max. 100%). Electricity costs remain fully deductible, while fuel costs will gradually decrease to 0% by 2028 (AY 2029). For vehicles acquired from 1 January 2026, electricity costs will follow a degressive deductibility, except for those acquired before 1 January 2027, which remain at 100%. Other costs will be calculated using a formula, excluding fuel factors, with a ceiling applied. Cars acquired between 1 January 2026 and 1 January 2028 will have deductibility up to 75%, with higher rates for cars emitting less than 50 gr CO2. The definition of ‘false hybrid’ will now include cars emitting over 75 gr/km, based on the new Euro 6e-bis standard. 

•  Flexi-Jobs: The exemption increases from 12,000 EUR to 18,000 EUR starting income year 2025, with annual indexing. 

•  Dependents: The resource threshold for being considered a ‘dependent’ has been increased to 12,000 EUR. 

•  Loan Interest Deduction (for other real estates than the own dwelling): This deduction is abolished from fiscal year 2026, effective 1 January 2025. 

•  Alimony Payments: Deductibility will reduce gradually: 70% in 2025, 60% in 2026 and 50% by 2027. Payments outside the EEA are non-deductible, except for beneficiaries residing in Switzerland. 

•  Freeze of Tax Reductions or Deductions: Several amounts related to tax reductions or deductions will be frozen from 2025 until 2030. 

•  Tax Simplification: Various tax exemptions and reductions are abolished, including allowances for long-distance travel, domestic employee salary reductions, adoption expenses, legal protection insurance premiums, and employer contributions for private computer purchases. The tax reduction for gifts decreases from 45% to 30%. 

Tax procedure changes

This law also provides for some tax procedure changes.  

These changes aim to reverse and simplify procedural reforms from 2022. Investigation and assessment periods will be as follows: 

•  3 years for standard tax returns (no changes). 

•  4 years for late and complex tax returns, further defined in the law. 

•  7 years in cases of fraud, applicable to both income tax and VAT (situation as it was before the reform of 2022). 

These changes apply from assessment year 2023.  

Additionally, the law provides: 

•  Broader access for designated officials to use CCP data for datamining and datamatching. 

•  Financial institutions must report balances of crypto-accounts and securities accounts. 

•  Direct access to CCP by officials in charge of tax on securities accounts in view of verifying the correct application of the provisions regarding this tax. Access by these officials is possible even if no indications of fraud are available and without prior notification to the taxpayer.

On 17 July, the Chamber adopted a first set of tax measures included in the Program law that has been published in the Official Gazette.  The other measures included in the Easter agreement are part of the law of 18 December 2025 containing various provisions, which has been adopted in December (see above). The main measures adopted are as follows:  

Carried Interest

The law introduces a new regime for individuals or related persons receiving carried interest from Belgian/foreign AIFs (alternative investment funds). The law defines the concept of “carried interest vehicle” and of “carried interest beneficiaries”. The income will be treated as investment income, taxed at a flat 25% rate (via withholding & income tax). The income that will be considered as “carried interest” can be the share of profits, dividends, capital gain, … after deduction of the acquisition value. The carried interest will not be reclassified as “professional income”. This measure will enter into force on the date of its publication in the MB/BS and will apply to income paid or attributed from this date. Carried interest vehicles being liquidated before the date of entry into force of the law will not be affected.

Liquidation reserve and VVPRbis regime

The law provides for an alignment of both regimes with, for the liquidation reserve, a reduced waiting period from 5 to 3 years and a new rate at 6,5%. The regime will depend on the date of creation of the reserve and the date of distribution. In this respect, note that the law provides for the possibility of distributing reserves created before January 1, 2026, at a rate of 6.5% if they have been held for a period of 3 to 5 years (provided that all other legal requirements are also met). For the VVPRbis regime, the rate of 20% applicable to dividends allocated or distributed during the second financial year after the cash contribution (made on 31 December 2025 at the latest) will gradually phase out. In respect of other cash contributions, the rate of 15% will be applicable to dividends distributed or allocated during the third financial year following the contribution or later. The changes regarding the liquidation reserve will apply to dividends attributed or paid from the date of the publication of this law in the Moniteur Belge/Belgisch Staatsblad (hereafter “MB/BS”). Those related to the VVPRbis regime will apply ten days after the publication of the law in the MB/BS.

Exit tax

This new tax introduces the concept of a “deemed dividend” (representing the latent capital gains) for shareholders when a company emigrates or restructures in a way that transfers assets abroad. Shareholders will be taxed on this deemed dividend as if they received an actual dividend, subject to applicable personal or corporate income tax rates. A tax credit mechanism will be available to prevent double taxation when these gains are eventually realised and distributed. The taxpayer will also be able to defer the tax payment. The company that transfers the assets must provide individual slips to shareholders. The new provisions will enter into force on the date of their publication in the MB/BS and apply to transactions referred to in art. 210, § 1er, 1er, 1°bis, or 4° ITC that take place from this date.

Tax on securities account

A new anti-abuse measure aiming to prevent taxpayers from circumventing the tax through artificial conversions or transfers of financial instruments is introduced. The new anti-abuse measure will enter into force on the date of its publication in the MB/BS and the first reporting obligation must be fulfilled by 31 December 2025 at the latest.

Tax procedure

The 10% tax increase for a first-time offense committed in good faith will be automatically waived. The good faith is presumed, except in case of an ex officio assessment (such as i.a. late tax return or absence of tax return). In case of an ex officio assessment, the taxpayer can still prove his good faith. This amendment is applicable for assessments enrolled as of the publication of this law in the MB/BS.