Tax measures: Personal Income Tax

Breaking news (adopted by the law of 18 July 2025)

Below you can find more detailed information on related topics to Tax measures - Personal Income Tax. 

Important side note: Only the topics that are highlighted in green have been formally approved by the government. All other topics are proposals and have not yet been formalized.
  • VVPR bis regime/liquidation reserve 

    Dividends distributed by companies that are 'small' can, under certain conditions, benefit from a reduced withholding tax rate instead of the normal 30% rate. 

    The favourable VVPR bis regime only applies to new shares issued as from 1 July 2013, either at the time of incorporation of the company or at the time of a capital increase. The shares must be fully paid up and registered. Subject to certain exceptions, the shares may not be transferred after contribution.

    Provided that all conditions are met, the VVPR bis regime provides that small companies can pay beneficial dividends as follows:
    - If the distribution takes place after a waiting period of three years at a withholding tax rate of 20%.  
    - If the dividend is paid only after four years or later, the rate drops further to 15%.

    Small companies also have the option to transfer part of their taxed profits to a liquidation reserve. At the time of this entry, there is an anticipatory levy of 10%. 

    Upon subsequent distribution of this liquidation reserve, additional withholding tax is due, the rate of which is determined by the time of distribution:
    - If the reserve is distributed as a dividend after at least 5 years, a reduced rate of 5% applies.
    - If the liquidation reserve is distributed before the end of the 5-year period,an additional withholding tax of 20% applies.
    - If the liquidation reserve is not distributed until the liquidation of the company, no additional withholding tax is due. 

    The liquidation reserve regime is now being adjusted in an effort to achieve greater harmonisation in taxation between the two regimes. 

    Thus, the waiting period for beneficial distribution will be reduced from 5 years to 3 years, but the withholding tax rate will increase from 5% to 6.5%. Converted, this means an effective tax rate of 15% (instead of currently 13.64%), which is in line with the benefit scenario under the VVPR bis regime. Distributions made before the 3-year vesting period has expired will be subject to the normal withholding tax rate of 30%.

    The VVPR bis regime, as we know it today, remains unchanged. 

  • Carried interest

    A specific and competitive carried interest regime has been introduced to stimulate funds activity in Belgium. This regime will provide for a maximum tax rate of 30% on income from movable assets and will not impact existing plans.  

  • Securities tax

    While an increase in the tax on securities accounts was initially envisaged (from 0.15% to 0.25%), the government has now stated that it will examine how, in line with the recommendations of the Court of Audit, the evasion of the annual tax on securities accounts can be combated.

  • Copyright

    The copyright tax regime is extended to computer programs, which are again eligible.
  • Abolition of federal interest deduction on second residences 
    • Based on the draft law of 3 July 2025, the federal interest deduction on second residences will be phased out completely.
  • Higher net income
    • To achieve higher net wages for working people, the government plans to 
      •    An increase in the tax exempt share for everyone who works. 
      •    A reduction in the special social security contribution and an increase in the employment bonus. 
      •    Simplification and harmonisation of existing collective bonus systems (CLA 90, profit bonus, etc.).
      •   The flexible reward system would be regulated by law. The government wants to reduce the pressure on gross pay by limiting the exchange of gross pay to a maximum of 20% of gross annual pay. 

  • Mobility budget
    • The existing mobility budget will be reformed into a mobility budget for all and will replace the existing employer support schemes for employees' commuting and private travel. 

  • Costs proper to the employer
    • A framework for employers' own costs would be introduced as soon as possible. 

  • Second pillar pension accrual for the self-employed
    • The various second-pillar schemes for the self-employed will be harmonised and simplified. The 80% rule will also be reformed. 

  • Introduction of a new deduction for the self-employed from 2027
    • A tax deduction will be introduced for the self-employed, both in their main activity and in a secondary activity, allowing them to deduct a first bracket from their profit and income (after deduction of professional expenses and social contributions), the amount of which will be increased in 2029.

  • Expat regime
    • The regime for foreign taxpayers will be adjusted to attract and retain international talent in Belgium by:
      •    increasing from 30% to 35% the reimbursement of the employer's own costs in relation to the remuneration, 
      •    abolishing the ceiling of EUR 90,000 for the reimbursement of the employer's own costs, and  
      •    lowering the required minimum gross salary from EUR 75,000 to EUR 70,000. 

For more information, we refer to our article regarding the solidarity contribution.

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