Draft program law including individual income tax measures approved by parliament
Global Employer Services | Reward & Mobility Alert
On 28 May 2026, the Belgian parliament approved a program law (Dutch | French) that includes several tax reform measures for individual income tax.
VVPRbis regime
Under the current rules of the VVPRbis regime, small companies may benefit from a reduced withholding tax rate from the standard rate of 30% on dividend distributions paid on shares issued for cash contributions as from 1 July 2013, when certain conditions are met. The reduced rate can only be applied to dividends distributed as from the third financial year following that of the contribution. The current withholding tax rates are as follows:
|
Tax Rate |
Dividends granted or allocated from profit distribution |
|
30% |
In the financial year of contribution and the following financial year |
|
20%* |
In the second financial year following the financial year of contribution |
|
15% |
In the third and subsequent financial years following the contribution |
*Only for contributions or capital increases made no later than 31 December 2025.
The program law will increase the reduced 15% withholding tax rate to 18%, effective as from the first day of the month following the publication of the law in the official gazette, as follows:
|
Tax rate |
Dividends granted or allocated from profit distribution |
|
30% |
In the financial year of contribution and the following financial year |
|
20%* |
In the second financial year following the financial year of contribution |
|
18% |
In the third and subsequent financial years following the contribution |
*Only for contributions or capital increases made no later than 31 December 2025.
Liquidation reserves
The program law has increased the rate that applies to distributions of liquidation reserves by small companies for which a three-year waiting period has been fulfilled from 6.5% to 9.8% (to achieve a total effective tax rate of 18%) for financial years ending on or after 31 December 2025.
As such, for dividends distributed from liquidation reserves established in financial years ending on or before 30 December 2025, the following rates apply:
|
Tax rate |
Dividends granted or allocated |
|
20% |
Before expiry of the three-year holding period |
|
6.5% |
After more than three years but less than five years |
|
5% |
After more than five years |
For dividends distributed from liquidation reserves established in financial years ending on or after 31 December 2025, the following rates apply:
|
Tax rate |
Dividends granted or allocated |
|
30%* |
Before expiry of the three-year holding period |
|
9.8% |
After more than three years |
*Exception: The withholding tax rate is 20% for dividends granted or allocated before the 10th day following the publication of the program law originating from liquidation reserves established on 31 December 2025.
Tax regime for copyrights: Scope of lump sum cost deduction limited
Income from copyrights is considered movable income up to a (gross) amount of EUR 77,220 (the indexed amount for the 2026 income year). In addition, authors can benefit from a lump sum cost deduction of 50% for the first EUR 20,590 and 25% for the next EUR 20,590, with the balance subject to a withholding tax of 15% (as well as communal taxes).
Under the program law, as from 1 January 2026, the lump sum cost deduction will no longer be allowed unless the taxpayer holds a “regular” or “plus” arts work certificate. Taxpayers who hold a “starter” or no certificate will only be allowed to deduct actual professional costs incurred.
With respect to the withholding tax requirements, the changes to the lump sum cost deduction will only apply to income paid or granted from the 10th day following the publication of the law in the official gazette. From that point onwards, withholding, reporting, and payment of withholding tax must be carried out in accordance with the new rules under the program law, without the need for retroactive corrections to movable withholding tax declarations made earlier in 2026. The remaining balance of taxes for any copyright income received before the 10th day following such publication (due to the limitation of the lump sum cost deduction) will be settled through the author’s individual income tax return.
A proposed new legal framework is pending before parliament in a separate law, which would bring software developers and IT professionals back into the scope of the deduction.
Partial wage tax exemption
Effective as from the 2027 income year, the program law introduces a correction factor to be applied when calculating the amount of professional wage tax withholding that is exempt from remittance to the treasury. This correction factor is intended to moderate the overall fiscal impact of such exemptions.
The correction factor will be applied as follows for remuneration paid:
- Between 1 January 2027 and 31 December 2027: 97%;
- Between 1 January 2028 and 31 December 2028: 93.35 %; and
- As from 1 January 2029: 95.9 %.
Increase of the annual tax on securities accounts
The program law implements a doubling of the rate of the annual tax on securities accounts holding more than EUR 1 million, increasing it from 0.15% to 0.3%. The increase will apply to the reference periods ending after the date of publication of the law in the official gazette.
