Federal coalition agreement 2025-2029

Of course, these measures must still be translated into legal texts in the coming months (possibly in a modified form), and we will have to wait for the final legal texts. Below are the main tax measures included in the coalition agreement. For some points, it will be crucial to see how they are effectively implemented in practice.

Corporate Tax

The reduced corporate tax rate:

• The current minimum gross remuneration of €45,000 will be increased to €50,000 and will be indexed.
• The remuneration of company directors may consist of benefits in kind for a maximum of 20% of the annual gross salary.

Distribution of liquidation reserves:

• Waiting period reduced from 5 years to 3 years.
• Increase in withholding tax rate from 5% to 6.5% as of 01/01/2026 for newly established liquidation reserves (resulting in an effective tax burden increase from 13.64% to 15%, the same as VVPRbis dividends).

Hybrid company cars – extended transition period:

• The maximum deduction percentage for hybrid cars will remain at 75% until the end of 2027 (instead of the end of 2025), but will decrease to 65% in 2028 and 57.5% in 2029.
• These deduction rates apply for the entire period the vehicle is used by the same owner or lessee.
• Fuel costs for hybrid cars = 50% deductible until the end of 2027.
• Electricity consumption for hybrid cars = same deduction percentage as for electric models.
• Exception: hybrid cars with max. 50 g/km emissions—if the deduction percentage according to the formula is higher than 75%, the higher rate may be applied until the end of 2027.

Dividend Received Deduction (DBI):

• Either a 10% minimum participation or a participation with a minimum acquisition value of €2.5 million.
• Becomes a “DBI exemption” (via an adjustment to the initial state of reserves).
• The 10% participation requirement remains unchanged.
• Stricter conditions for “large enterprises”: the participation requirement of €2.5 million is increased to €4 million => additional condition: the participation must qualify as a financial fixed asset (i.e., a lasting relationship with the company in which it invests, not considered as an investment).
• Withholding tax can only be credited against corporate tax if the receiving company grants the minimum director’s remuneration in the income year of receipt.
• DBI funds: 5% tax on capital gains upon exit.

Capital gains on shares:

Realized capital gains on shares remain exempt from corporate tax, provided the taxation and participation conditions are met (i.e., either 10% or €2.5 million—this will also be increased to €4 million, in line with DBI deduction conditions).

Meal, sports, culture, and eco vouchers:

• Maximum employer contribution for meal vouchers increased from €8 to €12.
• Increased deductibility of employer costs.
• Expansion of spending options for meal vouchers.
• Employer cost deductibility for meal vouchers will be increased by two times €2.
• Other existing vouchers (eco and culture vouchers) will be phased out in consultation with social partners.

Form 270MLH (rental annex to tax return): will be abolished and replaced with a less administratively burdensome alternative, considering the information already available to the tax administration.

Adjustment of corporate contributions based on total balance sheet value (=> small businesses pay less, large businesses pay more).

The group contribution scheme will be made more attractive by allowing both direct and indirect participations and no longer excluding new companies. The DBI deduction will be applicable to profits from a group contribution.

The investment deduction will become indefinitely transferable. The rates for increased investment deductions in energy, mobility, and environmental sectors will be standardized at 40%.

The option for accelerated tax depreciation on investments in research & development, defense, and energy transition will be introduced. For large enterprises, this will be a temporary scheme, allowing 40% of the acquisition value to be depreciated in the first year.

SMEs will again be allowed to apply declining balance depreciation.

Digital tax:

• Belgium will implement international agreements on digital taxation. This will ensure that large digital multinationals are taxable in Belgium even without physical presence, leading to a significant revenue increase.
• If no agreement is reached at the European or international level, Belgium will unilaterally introduce a digital tax by 2027 at the latest.

The penalty for insufficient advance tax payments will no longer be affected by signing a framework agreement under a tax shelter scheme.

Personal income tax

More take-home pay from 2027 for working people by, among other things, increasing the tax-free allowance, lowering the special social security contribution (BBSZ) and strengthening the social work bonus.

Copyrights:
The copyright tax regime will be expanded. Works protected under Book XI, Title 6 of the Code of Economic Law will be eligible for the copyright tax regime, including transfer or license of computer programs.

Solidarity contribution (cf. capital gains tax) of 10% on future realized capital gains of financial assets, incl. crypto assets, accrued from the time of the introduction of the solidarity contribution, where:

• Exemption of historical capital gains.
• Capital losses are deductible within the year, but without any transferability to a subsequent year.
• A foot exemption of EUR 10,000 is provided for the small investor. This foot exemption is indexed annually.
• For a substantial interest of at least 20% (listed or unlisted): always an exemption in the amount of EUR 1 million, according to the following tax rates:
  • Up to 1 mio EUR: 0%.
  • Between 1 and 2.5 million euros: 1.25%.
  • Between 2.5 and 5 mio euro: 2.5%.
  • Between 5 and 10 million euro: 5%.
  • From 10 mio euro: 10%

Securities tax: remains 0.15%.

Entrepreneur deduction for self-employed from 2027, both main and secondary profession: additional deduction on first tranche of profits and gains (after deduction of professional expenses and social contributions). Further increase in amount in 2029.

Tax free allowance & dependent children:

• Modernization of the supplement to the tax-free allowance. In the future, every child will receive the same allowance up to a certain ceiling amount.
• The supplement to the tax-free allowance for single parents only granted to truly single parents.
• The tax exemption for income from student work will be doubled and the maximum amount of net subsistence will be increased to 12,000 euros.
• The employment limit for student work is permanently increased to 650 hours.
• The tax credit for dependent children is no longer indexed.

Profit and Benefit Bealers:

• By 2025: doubling of existing incentives for equity.
• From 2026: elimination of tax increase for insufficient upfront payments
• Introduction of a 5th period for advance payments, i.e. no later than February 20 of the assessment year => reward with a bonification (tax reduction) of 0.5 x base rate (from Article 165 ITC).

The various 2nd pillar pension schemes for the self-employed (VAPZ, IPT, POZ) are harmonized and simplified.

Pensions 3rd pillar: increased pension savings will be integrated into conventional pension savings within a budget-neutral framework.

The expat regime is reformed: the tax-free allowance increases from 30% to 35%, the ceiling of 90,000 euros is abolished and the minimum gross remuneration is reduced from 75,000 euros to 70,000 euros.

The federal interest deduction for non-owner-occupied housing is eliminated.

The tax credit for unemployment benefits will be abolished, and the tax credit for the highest pensions will be phased out.

The marriage quotient will be cut in half for non-retirees by 2029.

The deductibility of maintenance benefits will gradually drop from 80% to 50%. Benefits to countries outside the EEA will no longer be deductible.

General arrangement of 180h tax-friendly overtime with a charge reduction for the employer and a tax reduction for the employee.

Maximum annual income for flexi-jobs will be increased from 12,000 euros to 18,000 euros. The maximum hourly wage increases from 17 euros to 21 euros. Extension of flexi-job system to all sectors.

Tax reduction for gifts to recognized institutions decreases from 45% to 30%.

Abolition of the increased cost flat rate for distant travel.

Abolition of the special cost flat rate for local mandates (mayors, aldermen, etc.).

A number of tax reductions, exceptions and exemptions will disappear: tax reduction in the context of investments in microfinance development funds, the tax reduction for domestic servants, the exemption for social liabilities, etc.

For various occasional incomes, including second-hand sales, a de minimis provision of EUR 2,000 is provided for in art. 90, first paragraph 1° W.

VAT

• The daily receipt book, various VAT registers, etc.: delete, adjust, or simplify. This will take into account the existing control possibilities and the information already available to the tax administration.
• Other administrative formalities such as the nil customer list, etc. will be abolished following the introduction of e-reporting.
• The VAT rate for the supply and installation of heat pumps will go from 21% to 6% for the next 5 years.
• The scope for demolition and reconstruction, at 6% VAT, will be extended and extended to supplies (while maintaining the current social conditions). However, for supplies, the surface area criterion is tightened from 200m2 to 175m2.
• VAT for the supply and installation of a fossil fuel boiler will be increased from 6% to 21% in the context of a renovation, cf. regime for homes older than 10 years.
• VAT on coal goes from 12% to 21%.
• There will be a clear definition for “renovation” and “renewal”. Also study how in time a sustainability condition can be introduced within the upcoming European regulations and without increasing the administrative burden.
• The tax administration will publish a circular on the flat-rate right to VAT deduction levied on mixed-use company bicycles.
• The federal government is committed to a modern fine policy concerning VAT, whereby the level of the proportional fine will take into account, among other things, the mitigating circumstance that the Belgian Treasury has not suffered any financial loss as a result of the infringement committed.
• In order to combat VAT fraud, “near real time reporting” will be introduced as of 2028 for transactions between VAT taxpayers and transactions for which a GKS is used

Procedure

• The tax penalty policy will be reformed. Initial good faith errors will no longer incur an automatic penalty of 10% tax increase, but the taxpayer will only receive a notice. The tax authorities will no longer impose an automatic penalty if these conditions for remission are met.
• The time limits for investigation and taxation in tax matters are set at 3 years (4 years for complex and semi-complex returns) from January 1 of the assessment year, except in cases of fraud or suspected fraud. In the case of fraud, the term will be set at 7 years from January 1 of the assessment year.
• Abuse with private foundations will be addressed. This will include clarifying federal law regarding underlying “disinterested purposes.
• The current BV exemption regime for R&D will be clarified and adjusted to ensure maximum legal certainty.
• Efforts will be made to restore the relationship between the taxpayer and the tax authorities.

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Authors of this article: Aleksandr Natanelov and Fikret Seven