Law including key employment and individual tax reforms approved by parliament

On 12 December 2025, the Belgian parliament approved a “draft law containing various measures” (Dutch | French), implementing several significant tax reform measures included in the federal government agreement. The legislation will be enacted when published in the official gazette, expected to be by the end of 2025.

This alert highlights the key changes from an employment tax and individual income tax perspective. For employers, these include retroactive amendments to the special tax regime for inbound taxpayers and inbound researchers, changes affecting the corporate tax deductibility of the provision of company cars and meal vouchers, and an increase in the threshold for flexi-job earnings. For individuals, there are changes to real estate taxation, the introduction of tax return simplification measures, restrictions on the deductibility of alimony payments, changes to the calculation of net disposable income of dependents, and various amendments to pension contribution rates and the pensions bonus.

Several other laws containing other significant measures from the federal government agreement are still being debated by the government and the parliament, including the proposed capital gains tax on financial assets and review of the automatic salary indexation system for “high earners.”

Key measures for employers

Special tax regime for inbound taxpayers and inbound researchers

The special tax regime for inbound taxpayers and inbound researchers (also referred to as the “expat regime”) is made more attractive with retroactive effect as from 1 January 2025, as follows:

• The “cost proper to the employer” allowance (a form of lump sum tax-free expense reimbursement) is increased from 30% to 35%;

• The maximum cap of EUR 90,000 on the cost proper to the employer allowance is abolished; and

• The minimum gross annual salary threshold to be eligible for the regime is reduced from EUR 75,000 to EUR 70,000.

The changes will apply to remuneration paid or attributed as from 1 January 2025. Applications for the expat regime for employees who commenced employment in Belgium during 2025 with a salary between EUR 70,000 and EUR 75,000 who would otherwise qualify for the regime may still be filed within three months after the 10th day after publication of the law in the official gazette.

Companies are advised to review the existing contractual terms for potentially affected employees, particularly in view of the current wave of special tax audits by the Belgian tax authorities.

Company cars

As from 1 January 2026, only zero-emission vehicles remain fully tax-deductible on acquisition via a new purchase, finance lease, or hire purchase agreement.

A deduction of up to 75% is available for plug-in hybrid vehicles (PHEVs) purchased, leased, or rented by 31 December 2027. For later acquisitions, a degressive deduction will apply:

• 65% for PHEVs purchased, leased, or rented in 2028;

• 57.5% for PHEVs purchased, leased, or rented in 2029; and

• 0% for PHEVs purchased, leased, or rented in 2030 and subsequent years.

A higher deduction rate applies to vehicles emitting less than 50 grams of carbon dioxide per kilometre.

Fossil fuel expenses (including compressed natural gas, diesel, and petrol) will no longer be tax-deductible as from 1 January 2026 for all cars, including PHEVs purchased, leased, or rented by self-employed individuals trading as a sole proprietorship (“éénmanszaak”).

Meal vouchers

As from 1 January 2026, the maximum employer/company contribution for meal vouchers granted to employees/directors is increased from EUR 6.91 to EUR 8.91.

The tax deductibility of meal vouchers for the employer/company is currently limited to EUR 2. As from 1 January 2026, if the maximum contribution of EUR 8.91 is reached, the employer/company may deduct EUR 4.

Flexi-jobs

The annual tax exemption for flexi-job earnings will be increased from EUR 12,000 to EUR 18,000 and will be indexed annually going forward.

Key measures for individuals

Real estate taxation

As from 1 January 2026, the following will be abolished:

• Ordinary interest deduction for loans on properties other than the main residence, including ongoing debts;

• Increased interest deduction on properties other than the main residence, including ongoing debts;

• Federal housing bonus;

• Federal building savings;

• Additional reduction for joint assessment for mortgage loan contracts concluded before 1 January 1989;

• Green loan interest reduction, although the 1.5% interest subsidy will continue to apply; and

• Energy-efficient housing reduction.

Only the tax reduction for long-term savings will be maintained for capital repayments and mortgage protection insurance premiums. 

Tax return simplification

The following measures have been introduced to simplify individual income tax returns:

• Abolition of the tax benefit for contributions made to a private PC plan (broadly a tax-efficient means for employers to provide computer equipment and/or internet access to employees for private use) as from 1 October 2025 (i.e., for contributions made after 30 September 2025), as well as “grandfathering rules” for old private PC plans;

• Abolition of the additional allowance for long-distance travel as from assessment year 2026;

• Abolition of tax reductions or exemptions for the following as from assessment year 2027:
  • Capital losses incurred during the complete distribution of a private privak’s capital;
  • Expenses to acquire an electric vehicle;
  • Expenses for a development fund;
  • Expenses to buy or install a charging station—the reduction is only granted for expenses incurred until 31 August 2024;
  • Wages of a domestic servant;
  • Expenses incurred in an adoption procedure;
  • Legal assistance insurance premiums;
  • Capital gains on company vehicles—the exemption will be limited to gains realised by 31 August 2025;
  • For social passive, no new exemptions will be granted for wages after 31 August 2025 for employees meeting the five-year seniority requirement and there will be a gradual phasing out of existing exemptions to mitigate retroactive effects on acquired rights; and
  • For self-employed individuals, exemption for additional employees and internships; and
• A decrease in the tax reduction for donations to charity from 45% to 30% of the donation as from assessment year 2026.

Alimony

With retroactive effect as from 1 January 2025, the deductibility of alimony paid or awarded will be gradually reduced as follows:

• 70% for payments made in 2025;

• 60% for payments made in 2026; and

• 50% for payments made as from 1 January 2027.

Additionally, as from 1 January 2025, if the recipient of the alimony is not a resident of the European Economic Area or Switzerland, the payer will not be entitled to a deduction for the amounts paid and the nonresident recipient will no longer be subject to Belgian taxation. As a consequence, no withholding tax should be applied to the payments.

Net disposable income of dependents

With respect to the net disposable income taken into account for an individual to be considered as a dependent for tax purposes, the following changes have been introduced as from assessment year 2026:

• An increase in the threshold for all children to EUR 12,000 for assessment year 2026 (to be indexed annually) to promote equal treatment of parents regardless of their living arrangements;

• To prevent the dual benefit of receiving a living wage and being considered a dependent, individuals receiving a living wage or the equivalent will no longer be considered as a dependent for income tax purposes; and

• Doctoral (PhD) scholarships will no longer be excluded in the assessment of whether a PhD researcher is a dependent.

Wijninckx contribution rate for supplementary pensions

The special Wijninckx contribution rate on occupational pensions for salaried workers will increase from 3% to 12.5%. The legislation will be effective as from 1 July 2025 and apply to contributions on or after 1 January 2026.

Replacement of the current pension bonus on the legal pension for self-employed workers, salaried workers, and civil servants 

Various measures will be introduced to gradually abolish the pension bonus to simplify pension calculation rules and control related costs. The key points of the reform are:

• Gradual abolition of the current pension bonus system for the self-employed, salaried workers, and civil servants through 31 December 2025;

• As a result of the abolition, the eligible service period is reduced to the period 1 July 2024 through 31 December 2025;

• The total eligible days are also reduced accordingly from 936 to 468 when the bonus accrual occurs across different employment statuses;

• The bonus may only be paid as a lump sum pension, no longer as an annuity; and

• Full abolition of the pension bonus as from 1 January 2026.

Solidarity contribution

The key changes to the solidarity contribution are as follows:

• Automatic withholding of the 2% contribution on pension payments due as from 1 January 2026.

• From 1 July 2027 onwards, Belgian pension payers must withhold an additional levy on the amount of the pension exceeding the aggregate threshold for occupational pensions of EUR 150,000. The additional levy will be calculated by Sigedis as 2% multiplied by the excess as a proportion of EUR 150,000.

• If the solidarity contribution withheld is too high, the overpaid amount will be reimbursed to the retiree.