Key figures corporate income tax: Disallowed expenses

Disallowed expenses Disallowed percentage
Non-deductible taxes* 100%
Regional taxes and fees 100%
Fines, penalties and confiscations of any kind* 100%
Non-deductible car expenses* Depending on CO² emissions
Benefit in kind for company cars (17% - 40%)* 17%/40%
Non-deductible reception expenses* 50%
Non-deductible business gift expenses* 50%
Non-deductible restaurant expenses* 31%
Non-specific professional clothing expenses 100%
Excessive interest 100%
Interest relating to certain loans 100%
Non-deductible borrowing costs  100%
Abnormal or gratuitous advantage 100%
Social benefits* 100%
Donations 100%
Impairment and losses on shares 100%
Recapture of previously exempt income 100%
Employee profit participation and bonuses 100%
Tax shelter expenses 100%
Non-deductible payments to certain countries 100%
*These titles are clickable and will take you directly to the corresponding content on this page.

Non-deductible taxes

General rule

Not deductible as a professional expense.

Exceptions
 Deductibility
Property tax100%
Municipal and provincial taxes100%
Excise and customs duties100%
Foreign taxes on foreign business income100%

Fines, penalties and confiscations of any kind

General rule

Not deductible as a professional expense.

This includes fines, including settlement fines, and administrative fines imposed by public authorities. This also applies where these fines are not criminal in nature or where their amount is calculated on the basis of a deductible tax. Increases in social security contributions are also included.

Administrative fines imposed by the authorities are also no longer deductible.

Exceptions
 Deductibility as a professional expense
Traffic fines that are recorded as a taxable benefit for the employee100%
Paid parking (choice of daily rate)General car expense (deductible depending on the car to which this expense is attached)

Non-deductible car expenses

To determine the non-deductible portion of car expenses (including fuel costs), the following rules apply:

  • A flat rat of 60% applies where CO² emissions are at least 200 grams per kilometer or where no CO² emission data is available from the Vehicle Registration Service.
  • A percentage determined according to the following formula in all other cases: 100% - [120% - (0.5% x coefficient x g CO² per km)], where the coefficient is set at 1 for diesel vehicles and 0.95 for petrol vehicles. Where the vehicle is equipped with a natural gas engine and the taxable horsepower is less than 12 fiscal horsepower, the coefficient is reduced to 0.90. The percentage is rounded up or down depending on whether the hundredths digit reaches 5 or not.
Purchased, leased or rentedDeductibility as a professional expense
Before 01/01/2027100%
Between 01/01/2027 and 31/12/202795%
Between 01/01/2028 and 31/12/2028 90%
Between 01/01/2029 and 31/12/2029 82.5%
Between 01/01/2030 and 31/12/2030 75%
From 01/01/203167.5%
Purchased, leased or rentedDeductibility as a professional expense
Before 01/07/2023(Min. 50% - Max. 100%)*
Between 01/07/2023 and 31/12/2025AY 2024 (FY 2023)
AY 2025 (FY 2024)		(Min. 50% - Max. 100%)
AY 2026 (FY 2025)Min. 0% - Max. 75%
AY 2027 (FY 2026)Min. 0% - Max. 50%
AY 2028 (FY 2027)Min. 0% - Max. 25%
AY 2029 (FY 2028)0%
From 01/01/20260%

*Minimum deductibility of 40% applies for CO² emissions ≥ 200 g CO² per km or where no CO² emission data is available from the Vehicle Registration Service. 

The deductibility of fuel, petrol/diesel, used by plug-in hybrid vehicles is limited:

Purchased, leased or rentedDeductibility as a professional expense
Between 01/01/2023 and 30/06/2023Maximum 50%
Between 01/07/2023 and 31/12/2025Assessment years 2024, 2025, 2026 and 2027Maximum 50%
Assessment year 2028Maximum 25%
Assessment year 2029No deductibility

In the case of fake hybrids, deductibility is calculated on the basis of the CO² emissions of the corresponding vehicle with combustion engine. If no equivalent vehicle exists, deductibility is obtained by multiplying the CO2 emissions by 2.5.

Benefit in kind for company cars (17% - 40%)

Car expenses corresponding to 17% of the benefit in kind (BIK) relating to a company car qualify as disallowed expenses. This percentage increases from 17% to 40% if the company also pays all or part of the fuel costs relating to the private use of the vehicle. 
Where the taxable BIK for the employee is reduced due to a personal contribution, this may not reduce the amount of the disallowed expense. Even where the taxable benefit for the employee is fully eliminated because of that personal contribution, the company remains required to record 17% (without fuel card) or 40% (with fuel card) of the original benefit, before deduction of the personal contribution, as a disallowed expense. 
This rule also applies to legal entities subject to the tax on legal persons, as well as to non-resident taxpayers.

Non-deductible reception expenses

General rule
 Income taxVAT 
Deductibility50%0%
Exceptions
 Income taxVAT
Promotional events, product launches, open days and demonstrations with an advertising characterIn principle, the general rule applies. Costs relating to premises, depreciation, personnel, furniture, etc.: 100% deductible + 100% deduction for the costs of goods and promotional itemsCourt of Cassation of 08/04/2005 and 15/06/2012 and decision E.T. 124.247 of 13/03/2015:
  • Costs that merely create a generally favourable atmosphere: VAT is non-deductible;
  • Costs that directly promote the sale and advertising of specific products and services (= often a question of fact): VAT is 100% deductible.

Non-deductible business gift expenses

General rule
Income taxVAT
If the value is less than EUR 125: 50% deductible, including non-deductible VATOne business gift per business relationship and per calendar year with a purchase price or cost below EUR 50: 100% deductible, excluding VAT.

Purchase price or cost higher than EUR 50, excluding VAT, per gift or several low-value business gifts during the calendar year to one business relationship: VAT is non-deductible
Exceptions
 Income taxVAT
SponsoringThe consideration effectively constitutes "advertising": 100% deductibleSponsoring by payment:
  • if advertising is received in return: VAT is 100% deductible, provided that a compliant invoice is received, unless the sponsored party is not subject to VAT
  • if no advertising is received, there are no VAT consequences
Sponsoring by exchange of services, sponsoring in exchange for advertising: VAT is 100% deductible if there is mutual invoicing with VAT for each transaction, unless the sponsored party is not subject to VAT
Sponsoring without consideration: the VAT on the sponsored good must be corrected
GiftsGift > EUR 125: 100% deductible, subject to reporting on form 281.50, as it constitutes a benefit in kind for the recipientVAT on business gifts is 100% deductible, provided that:
  • The gift is given in the context of professional relationships
  • It does not concern tobacco products or spirits
  • The purchase price/normal value is < EUR 50, excluding VAT
  • The gift is not a promotional item
Promotional items100% if:
  • The name of the donor remains permanently and visibly displayed on the items
  • The items are of low value, and
  • The items are distributed on a large scale
100% deductible, excluding reception expenses, if:
  • The items are intended for large-scale distribution
  • The items have a low value for those who receive them
  • The items prominently and permanently bear the name of the donor
Business trips abroad and gifts100% if the gifts are handed over during a business trip abroadGeneral rule
Commercial samples and specimens, of products sold by the company itself100%VAT is 100% deductible, provided that the costs are deductible for corporate income tax purposes

Non-deductible restaurant expenses

General rule
Income tax - deductible as a professional expenseVAT deduction
69% deductible (incl. non-deductible VAT)Not deductible
Exceptions
 Income taxVAT
Re-invoicing of restaurant expensesRe-invoiced costs separately mentioned on the invoice:
  • 69% deductible for the recipient
  • 100% deductible for the party re-invoicing the costs
  • Re-invoicing of costs in the context of the main transaction: VAT deduction according to the regime of the main transaction
  • Re-invoicing of the cost as such: 100% only for the issuer of the invoice
Restaurant expenses of staff responsible for supplying goods or services outside the company100% deductible if the expenses are incurred by staff who supply specific goods or provide a specific service outside the company, where the assignment lasts at least 6 hours - flat-rate allowance for “business trips”100% deductible provided that a proper invoice is issued in the name of the customer; a VAT receipt is not sufficient
Restaurant expenses as part of a seminar during a training day69% deductible if the costs are itemised on the invoice; otherwise, there is a risk that the entire invoice will be subject to a deduction limitation100% deductible if the seminar and training costs are mentioned separately
Restaurant expenses included in a hotel invoice69% deductible if the costs are itemised on the invoice; otherwise, there is a risk that the entire invoice will be subject to a deduction limitationVAT is non-deductible unless:
  • restaurant expenses of staff responsible for supplying goods or services outside the company
  • re-invoicing of restaurant expenses as such

Social benefits

General rule
Income taxVAT
Non-deductible
  • The benefit granted is individual in nature: 0%
  • The benefit granted is collective in nature: 100%
Exceptions
 Income taxVAT
Free distribution of soup, coffee and soft drinks

Fruit for staff during working hours		100%100%
Professional training for staff for profession-specific training100%100%
Meal vouchersDeductibility of EUR 2/voucher, or EUR 4/voucher if the employer contribution is EUR 8.91/voucher
Conditions:
  • Maximum employer cost: EUR 6.91/voucher, or EUR 8.91/voucher for vouchers granted from 01/01/2026
  • Minimum employee contribution: EUR 1.09/voucher
100% deductible on the services of the company issuing the meal vouchers
Eco vouchersNot deductible for the employer
Exempt social benefit for the beneficiary, subject to conditions		100% deductible on the services of the company issuing the eco vouchers
Gifts to staff100% deductible for the employer only if the gifts are for ALL employees AND:
  • Maximum EUR 40/year/employee on the occasion of an annual event, e.g. Christmas, birthday
  • Maximum EUR 120/year/employee granted on the occasion of an honorary distinction
  • Maximum EUR 40 per full year of service upon retirement of the employee, with a minimum of EUR 120; for social security purposes, however, a maximum of EUR 1,000 applies
  • Maximum EUR 245 in the case of marriage or legal cohabitation
VAT is deductible provided that the following conditions are met:
  • Gifts are distributed to ALL staff members, or to children of staff members who fall within a predetermined age category
  • Purchase price, or normal value, < EUR 50
  • It does not concern tobacco products or spirits

Note: VAT deduction is only allowed for one occasional gift per beneficiary per calendar year