Tax measures: Personal Income Tax

Following the adoption of the Program Act, the rate will be increased from 15% to 18% for all payments made on or after the first day of the month following the month in which the Act is published in the Belgian Official Gazette, regardless of the date of contribution. 

• Securities tax

  
  The budget agreement provides for an increase in the securities tax rate. It would rise to 0.30% for securities accounts with an average value exceeding €1,000,000. In addition the tax authorities will gain access to the CAP for the application and monitoring of the securities tax, effective 1 December 2026.

• Copyright

  
  Income from copyrights is taxed at a favorable withholding tax rate of 15% up to an amount of 77,220 euros (indexed amount for the 2026 tax year). In addition, a lump-sum cost deduction currently applies, calculated on a tiered basis: 
  - 50% on the first bracket up to 20,950 euros
  - 25% on the next bracket from 20,590 euros to 41,180 euros
  - No deduction on theportionabove 41,180 euros
  
  The Program Act amends this tax regime retroactively as of January 1, 2026. From that date, the lump-sum cost deduction will only apply to taxpayers who hold a “ordinary” or “plus” artwork certificate. In addition, the cost deduction will only be applicable to the the activities covered by the certificate. If the taxpayer also receives copyright income relating to a non-recognized activity, the lump cost deduction cannot be applied to the non-recognized activity. Holders of a “starter” artwork certificate or taxpayers who do not hold an artwork certificate will no longer be able to apply the lump-sum expense deduction. However, they may still choose to prove their actual expenses. 
  
  The above changes take effect as of January 1, 2026, and apply to all income paid or awarded from that date. For the purposes of withholding tax, however, a transitional arrangement applies, whereby the new restrictions will only take effect on the tenth day following the publication of the Program Law in the Belgian Official Gazette 
  
  Until then, the current method of calculating withholding tax remains in effect. 
  
  Finally, the copyright tax regime will be extended to software developers, which will once again be eligible for this regime. However, they will not be able to apply the lump-sum cost deduction since they will probably not have an artwork certificate. 
  
  Note that the extension to the IT sector is not foreseen in the program act, but is included in the draft bill regarding personal income tax reform. It remains to be seen once this law is finally adopted.

To ensure that working taxpayers have more disposable income, the following changes are being implemented: 

• Meal vouchers  

  • To increase the net purchasing power of employees, the maximum contribution by employer to the meal voucher will be increased from EUR 6.91 to EUR 8.91.  
  • Only if an employer chooses to increase the contribution to EUR 8.91 the tax-deductible amount will be doubled to EUR 4 per meal voucher.  
  • These new amounts will apply to meal vouchers granted from 1 January 2026 
    
    

• Tax work bonus  

  • Employees with a low-wage receive a reduction in their social security contributions through the work bonus. The work bonus indirectly increases the taxable professional income, however, this is compensated by a tax reduction through the fiscal work bonus.
  • Employees with a low reference monthly wage (gross wage between 2.777,83 EUR and 3.271.48 EUR, wage brackets valid since 1 February 2025) ) currently enjoy a reduction of their withholding taxes amounting to 33,14% calculated on the social work bonus. The reduction will be increased to 35% from assessment year 2030.    
  • Employees with a very low reference monthly wage (gross wage lower than 2.777,83 EUR, wage bracket valid from 1 February 2025) currently enjoy a reduction of their withholding taxes amounting to 52,54% calculated on the social work bonus. The reduction will be increased to 72% from assessment year 2030.
        

• Reform Special contribution social security (BBSZ) 

  • BBSZ is currently calculated on the joint taxable income and is financed partly via the social security (pre-financing via deduction via payroll) and partly via the personal income tax return (final settlement)
  • Calculation will be per taxpayer and no longer based on the joint taxable income 
  • Maximum contribution will be halved 
  • Lower income limit will be increased and the applicable percentage associated with this bracket will be reduced 
  • Planned entry into force: income year 2029 
  • Amendments will also affect the amount of BBSZ withheld via the payroll  
    
    

• Overtime

  • Recovery/ “ Relance” overtime 
    • Number of voluntary overtime hours will be increased to 360 hours on an annual basis from 1 January 2026 
    • 240 of the voluntary overtime hours can be exempted from income tax provided no overtime pay (“overwerktoeslag”)is granted and the remuneration for the exempt voluntary overtime hours is reported on the tax assessment notice. 
  • Tax-friendly overtime with overtime pay 
  • Temporary increase from 130 to 180 hours of overtime with overtime pay becomes permanent and applies to overtime performed as of 1 January 2026 and applies to all sectors 
  • Increase to 280 overtime hours for road and railway works and 360 overtime hours for the hotel sector 
    
    

• 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.

• Remunerations of young athletes 

  • Already in 2018, the minimum age for professional footballers was lowered from 16 years to 15 years provided that the first two years of secondary education were completed (= end of full-time compulsory education)
  • The minimum age in the ITC for the application of the separate tax rate of 16.5% that applies to the first bracket of income will also be adjusted to 15 years.  
  • Applicable to all remuneration paid or granted from 1 January 2026  
  • Separate tax rate applicable to retired tax payers who earn an additional income 
    • Retirees with a full career of 45 years or after reaching the legal retirement age who are still engaged in a professional activity (not via flexi-job status) will be subject to a separate tax rate of 33% on the income received from this activity as of January 1, 2027. 
    • Consequence: the income will no longer be taxed at the progressive tax rates unless it would be more beneficial. 
    • However, they will be excluded from the overtime system
        

• Living wage & equivalent living wage 

  • Living wage and equivalent living wage granted from 1 January 2026 will be subject to personal income tax as replacement income so that all income received by a taxpayer is taken into account when granting tax benefits
  • For the purposes of tax relief for replacement income and pensions, the (equivalent) living wage will be considered a separate income category with its own tax relief. The tax relief will also be further phased out (see further on tax-free allowance).  
    
    

• Gross salary exchange 

  • Gross salary may only be converted up to 20% of the annual gross pay into benefits in kind that are valued on a lump-sum basis.  
  • If exceeded, a distinction should be made between: 
    • Employees + directors of associations taxed as a legal entity  : separate levy of 7.5% for excess benefits due by the employer, which is not tax deductible  
    • Company directors: loss of reduced corporate income tax rate  
    • Calculation should be done by category 
    • Social benefits should not be taken into account for this exercise 
      
      

• The following measures are also included in the coalition agreement but have not yet been incorporated into law:

  • Simplification and harmonization of existing collective bonus systems (CLA 90, profit bonus, etc.).
  • 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 harmonized and simplified. The 80% rule will also be reformed. 

• Basic allowance  

  • The tax-free allowance will be increased over 4 assessment years (2027 to 2030).
  • The base amount will be increased from  4.785 EUR to 6.230 EUR, this amount still needs to be indexed. 
  • It is the government's intention that the tax free allowance after applying the indexation will amount to 15.300 EUR as of the assessment year 2030.  

• Allowance for dependents 

  • Current regime for dependent children: depending on the number of dependent children, the amount of the tax-free allowance per child increases as well as the rate at which the tax on the allowances is calculated. 
  • Objective: the same allowance for each child 
  • The reform will happen systematically namely ,the tax-free allowance for 1 or 2 dependent children will be increased in 4 steps, so that the amount will be equalized by assessment year 2030.  
  • Temporary freezing of the indexation until assessment year 2030 except those where the taxpayer is disabled 
  • The additional allowance for single parents is currently also granted to cohabiting parents, from assessment year 2030 on this will only be for "real" single parents, being taxpayers whose family on 1 January of the assessment year does not include any person other than their children, ascendants and relatives up to  the second degree, or persons on whom the taxpayer was wholly or mainly dependent as a child. The scope is aligned with that of the additional supplement to the tax-free allowance for "real" single parents with a low activity income. 
  • In case the allowance on the tax-free allowance for dependent children cannot be fully utilised because the taxpayer has little or no tax to pay, it is converted into a refundable tax credit.   
  • From assessment year 2027, taxpayers with income from scholarships under which they accrue social rights but are not subject to income taxes will be excluded from the application of this tax credit.  
  • Taxpayers receiving a (equivalent) living wage whose total net income is at least EUR 7,104 will be entitled to a minimum tax credit for assessment years 2027 to 2029. 

• Calculation of the taxes on the tax-free allowance 

  • From assessment year 2030, the calculation of the taxes on the tax-free allowance will be adjusted to the same rates as the ones applied to calculate the tax due. The separate brackets and rates  that currently apply will be abolished. 

• Tax relief for pensions 

  • As a result of the increase in tax-free allowances, the tax relief for the highest pensions will be reduced as from assessment year 2027 
  • The general tax reduction for pensions, where the level of joint taxable income will determine whether or not a reduction will still apply namely: 
    • Joint taxable income ≤ EUR 29,800 (basic amount) or EUR 51,560 (indexed for 2026) : no change to the phasing-out scheme 
    • Joint taxable income > EUR 36,535 (basic amount) or EUR 70,570 (indexed for 2026) : no tax reduction 
    • If joint taxable income is between the above limits: linear reduction of the reduction to EUR 0. 

• Tax reduction unemployment income  

  • Basic reduction will be reduced to a quarter, while additional and supplementary reductions will be eliminated entirely 
  • Will be implemented from assessment year 2027 through assessment year 2029 
  • Reduced basic reduction also disappears from assessment year 2030 
  • Exception for "real" single parents, basic reduction will be only reduced to half 
  • Unemployment benefits with company supplement will continue to be treated as "other replacement income" which does allow for the reduction 
  • The exception for unemployment benefits with company allowance will be abolished as of tax year 2027 onwards

• Marital quotient  

Married couples and legal cohabitants filing a joint return can apply the marital quotient. The marital quotient allows that for tax calculation purposes, maximum 30% of the professional income of one partner is transferred to the other partner with an absolute maximum of EUR 13,460 for assessment year 2026 in case one of the partners has no or only very limited professional income. 

This favourable regime will be gradually phased out however a distinction will be made between : 

- Pensioners (both spouses/legal cohabitants partners who have reached the legal retirement age on 1 January of the assessment year ) : phase out of over a longer period, with a complete abolishment from assessment year 2046. During this entire period, the 30% rate will be maintained, but the maximum amount will be lowered.  
- Other taxpayers: the marital quotient will be halved by assessment year 2030.  

From assessment year 2027, the maximum amounts will no longer be indexed.  

However, note that the personal tax-free allowance that cannot be completely utilized by one of the partners can still be transferred to the other partner. Hence, the impact of the elimination of the marital quotient remains limited.  

• Prepayments 

  • Increases in case of no or insufficient prepayments: 
    • Eliminated from tax year 2027 for self-employment professionals, liberal professionals and for income attributed to their cooperating spouses. 
    • Will still apply to company directors 
  • Entry of a 5deperiod: 
    • Runs from 21 December of the income year to 20 February of the assessment year 
    • Tax bonus / decrease of 0,5 times the basic rate for self-employment professionals, liberal professionals and their assisting spouses. 
    • Applicable from assessment year 2027, meaning the first 5thperiod runs from 21 December 2026 to 22 February 2027. 
  • Shortening 1stperiod: 
    • Runs from 21 February to 10 April of the income year 
    • Valid from assessment year 2028 onwards 
  • Exclusion of bonification 
    • No application of bonification for tax on profits and gains of independent helpers and allowances of parliamentary and provincial councillors  
    • Applies from assessment year 2027 
  • New regulations do not apply in corporate tax 

• " Minimis " regulation 

  • Scope: income within normal management of privately held assets consisting of real estate, portfolio values and movable objects. Financial assets are not included.  
  • Irrefutable presumption is introduced stating that if the gross income does not exceed EUR 972 per taxpayer and per assessment year (= basic amount, indexed for assessment year 2027: 2.000 EUR), the transactions will fall within the scope of “normal management” of private assets 
  • If the income exceeds the upper limit, it is still up to the tax administration to prove the taxable nature of the income in order to levy taxes on the income exceeding 2.000 EUR 
  • Presumption does not apply to transactions within the scope of a professional activity 
  • Applicable from assessment year 2027 

For more information, we refer to our article regarding the capital gain tax.