Objective: workers keep a too limited part of their gross salaries due to the remarkably high burden of taxation on such income in Belgium, which is primarily due to the combination of narrow tax brackets and high tax rates. The reform will increase of the net wages of everyone who works from 1 January 2025, with a focus on wages below the median, mitigating the currently extremely high and quick progressivity of marginal tax rates on labour income:

• The tax benefit resulting from the increase in the tax-free allowance will not be granted to replacement income.

• Abolition of the Special Social Security Contribution from 2025.

• Increase of the work bonus throughout the legislature. Changes to the rate structure so that workers have more left over from a wage increase or indexation.

• Increase in the value of the meal voucher and elimination of all other vouchers (eco-, consumption, etc.). The impact of the price increase is neutralized for the employer.

• Gradual increase of the childcare reduction from 45% to 100%; only deductible from professional income.

• The tax reform should once again make it more interesting to reward personnel in cash, rather than in benefits in kind. The existing bonus systems (CBA 90, profit premium, etc.) will be merged into one unique cash-bonus system.

• The tax-free sum for children at charge will be equal for each child (budget neutral measure).
  

Objective: the reform aims at rendering our economy resilient, innovative, and sustainable, so that Belgium is not only competitive compared to other countries but stands out compared to these. This will be realized through cost reductions for enterprises and the stimulation of innovation.

Cost reductions for enterprises

• Reduction of labour costs for low and middle wage earners; Introduction of a (high) wage ceiling for the levying of the employer's social security contribution, which will lower the cost price of older workers and higher profiles on the labour market.

• Reduction of energy costs for energy-intensive companies that are in competition with foreign companies.

• Innovative companies in the field of maritime transport must be able to continue to benefit from the tonnage tax system.

Stimulation of innovation

• Maintain existing R&D incentives and improve their impact.

• Better access to these incentives for innovative small and medium-sized enterprises.

• Better targeting of the innovation income deduction by tightening its scope of application and introducing the requirement of a European patent.

• Resources are reallocated by decreasing the innovation income deduction from 85% to 80% on the one hand and increasing the investment deduction for research & development on the other hand.

• Increase the partial wage tax exemption for researchers in the private sector from 80% to 85%.

• Tackling of the improper use of the partial wage tax exemption; evaluation and adjustment of the existing exemption for holders of a bachelor’s degree.
  

Preserving the attractivity of Belgium for foreign investments

• Improvement of the tax regime for in-bound taxpayers to attract and retain international talent to Belgium.

• More attractive and simpler system of fiscal consolidation; more flexible application of the interest deduction limitation; The foreign tax credit and all investment deductions can be carried forward.

• Accelerated depreciation of certain investments, e.g. in research and development.

• More legal certainty for R&D investments by setting up a separate 'research and development' unit within the administration.

• Possibility of recognition as a "research centre" for enterprises realizing structural R&D, triggering long term certainty. Incentives for such research centres are reinforced.

• Establishment of a separate 'investments' unit fore Belgian and foreign enterprises investing in Belgium, coupled with a specific rapid ruling procedure for large investment files.

Objective: the government aims at supporting and strengthening the self-employed status, including several measures to make it more attractive to work as a one-man company (not via a corporation) from a tax and administrative point of view.  Introduction of entrepreneur's deduction for self-employed both in main or secondary occupation: one can deduct 20% of his profits (incl. those of a liberal profession) or income from his taxes, with a maximum of EUR 20,000.

• Abolition of a series of smaller taxes and duties and administrative formalities.

• Revision of social security contributions for self-employed persons in a secondary occupation

• Abolition of special social security contribution for the self-employed.

• Abolition of the tax increase in the event of insufficient tax prepayments and reinforcement of the bonification.

• Doubling the existing own resources incentive.

• Simplification of deduction of car expenses: 50% deduction for environmentally friendly cars; higher deduction for CO2-free cars.

• Increase of the maximum contribution percentage of the Private Supplementary Pension for the Self-Employed (VAPZ/PLCI) to 10%.

• The premium tax for the Pension Agreements for self-employed (POZ) will be abolished.
  

Objective: financial investments are currently subject to various tax regimes. Investors should make investment decisions based on economic considerations, without disproportionate impact of tax regulation on these decisions. These tax regimes will be aligned where necessary and rendered simpler and more transparent for the investors.

• Introduction of a generous tax basket of [XXX] euros for all movable income, regardless of its origin. The tax exemption will be applied to the first bracket of income from capital, regardless of the type of investment.

• Adjustment of existing tax shelters for start-ups and growth companies to encourage savers to invest.

• Bundling of tax reductions in clearly defined baskets (pension build-up in the framework of a professional activity, individual pension saving, saving & investing (“beleggen” / “investir"), investments (cfr. Cooreman De Clercq) and insurances. The taxpayer will be able to spend a maximum amount to be deducted per basket.
  
• Ensure legal security for occasional income by introducing an exemption for a defined maximum amount.

• Modernisation and simplification of the stock exchange tax to ensure a level playing field between various investment vehicles. The rate for collective investment funds and fund of funds will be revised.

• Abolition of the stock exchange tax for small and mid-caps.

• Exemption from stock exchange tax for 5 years in case of new IPO.

• Reduction of compliance obligations around IPO.

• Relaxation of legislation on private privak / pricaf.

• Reduction of the withholding tax percentage from 30% to 27%.
  

Objective: the government strives for an efficient, fair, and simpler corporate tax regime.

• Extension of the digital investment deduction (currently only available to small businesses) to reinforce the technological and IT sectors.

• Adjustment of the system of sanctions in the event of direct and indirect tax audits; the non-compensation with available tax deduction in the event of a correction upon a tax audit (cash for tax rule – art. 206/3, §1, al. 2 ITC92)-  only applies in the case of serious violations and no longer in the case of violations in good faith or due to administrative omission.

• Collective outpatient insurances and group hospitalisation insurances for the benefit of employees will become tax deductible.

• Tackling improper use of the company form: increase of the minimum wage from 45K to 50K for company directors to benefit from the reduced corporate tax rate of 20% on the first 100K; prohibition on paying this salary in an alternative form of remuneration.

• Full deductibility of costs related to company crèches on the part of the employer and full exemption from taxes for the employee from 1 January 2025.
  

Objective: the current complexity of the corporate tax system often constitutes a challenge, primarily for SME’s. The corporate tax regime is simplified, and its predictability is improved. 

• Simplification of the system of disallowed expenses. Option to calculate (some) disallowed expenses in a simplified manner (e.g. as a fixed percentage of total personnel costs). 
• Simplification of the corporate tax systems through an abolition or simplification of various exceptions, exemptions, …  
• Conversion of the dividend received deduction into a dividend received exemption; In the case of large companies, it must concern a holding with which a long-term relationship is established. In addition, a scheme for active DBI’s / RDT’s will be introduced. 
  

Objective: the government aims for an individual income tax system which is simpler to understand, so that taxpayers can more easily comply with their obligations without unnecessary complications.

• Abolition of small deductions, exceptions and exemptions, a.o. tax reduction for electrical vehicles, tax reduction for domestic servants, lump sum allowance for long-distance commute, etc.
  

• Harmonization of the social and fiscal wage concept; New framework for costs proper to the employer.

• The lump sum valuation of a number of fringe benefits (free provision of housing, heating, electricity and domestic staff) will be better aligned with the are no longer taxed on a flat-rate basis but on their actual value.

• Ban on new gross salary sacrifices on regular wages from 2025; The granting of certain benefits (e.g. extra-legal holidays) can only be on top or added to the gross salary.

• Abolition of the tax credit for unemployment benefits that exceed one year.

• The existing tax credits will be converted into tax reductions.  As a result, the tax due can still drop to 0 euros, but no longer be negative.

• Living wages remain tax-free but will be taken into account when determining the applicable tax rate.

• Abolition of marital quotient for non-pensioners - phase out scenario; Extinction over a longer period of time for of the pensioners regime.

• Abolition of income limit for students to be considered at charge for tax purposes.

• Alimony payments granted from 1 January 2025 will no longer be tax deductible for the payer but will also no longer be taxable for the beneficiary. Introduction of a phase-out scenario for taxpayers who currently apply the system.

• New maximum amounts for tax purposes will be introduced and will not be indexed during 5 years.

• Modernisation tax-free allowances for children at charge as the same increase should apply for every child up to a certain ceiling.
  

Objective: the government strives to use subsidies in a more focused way and leverage financial resources more efficiently. 

• The plus plans are limited in time to the first [26] quarters after the recruitment and the amount of these plans is made degressive.

Objective: the tax reform will uphold the opportunities that the climate challenge offers for our enterprises and help all households to render the transition that is required affordable.

• The limitations to the carry-forward of the investment deduction will be abolished. The investment deduction will be simplified and rendered more accessible in particular for investments in the energy transition.

• Increase of maximum mileage allowance for travel by bicycle.

• Reduction of VAT rate for solar panels, solar boilers, and heat pumps from 21% to 9%.

• Expansion of the scope of the existing VAT regime for demolition and reconstruction at 9%.

• Increase of the VAT rate on firewood and coal to 21%.

• Inspection fee on domestic fuel oil would be increased

• Reduction of the refund of professional diesel up to the level of France.

• Simplification of the flight tax.

• Increased taxation of fuel cards via disallowed expenses.

• Car taxation regime that is more technology neutral.

• Excise duties on petrol/diesel will be aligned with applicable rates in neighbouring countries.

Objective: the VAT gap will be substantially reduced through different changes.

• Harmonisation of the reduced VAT rates of 6% and 12% into a new rate of 9%.

• The catering sector will fall under the 9% rate.

• Abolition of the packaging levy for reusable packaging and reduction of excise duties which are higher than those of neighbouring countries.

• The threshold of EUR 25.000 for the white cash register will be expanded to the entire hospitality industry and to other retail sectors.
  

Objective: the tax reform should ensure a fair and transparent system where all taxpayers contribute fairly through an overall broadening of the taxable base (reduction of exceptions and deductions) and a decrease of tax rates. The above should contribute to a better spread of the tax burden between taxation on labour and taxation on capital.

• Final withholding tax on movable income continues to exist but all income will be mentioned on the tax bill (to consider the total income when granting of social allowances)

• The VVPRbis system will become less favourable with respect for acquired rights.

• Extinction of the 20% withholding tax rate on distribution of dividends from the liquidation reserve. Increase of the 5% withholding tax rate to X% in case of distribution beyond 5 years. Small businesses can continue to distribute dividends at a beneficial rate. Shortening of the existing waiting period.

• Capital gains tax of 10% on financial assets, without retro-active effect and with exemption for historical capital gains as of the entry into force of the tax; introduction of a basic exemption of EUR 6K; Costs to acquire or maintain financial assets become deductible (e.g. tax on securities accounts and stock exchange tax); Capital losses become deductible and transferable; exemption in case of active re-investment; arrangement for historical capital losses that cannot be carried forward unlimitedly.

• Sale of substantial interests (>5%) by the historical and active shareholder(s)-entrepreneur remains untaxed up to an amount of EUR 2.5 M.

• Belgium currently has no specific tax rules for carried interest. A specific regime, competitive with existing regimes in neighbouring countries, will be introduced to stimulate fund activity in Belgium. The regime will provide for a tax rate of maximum 15% for movable income and will not impact existing plans.

• Revision of the capital gains tax on real estate.

• Complete extinction of federal tax benefits related to housing.

• Increase of taxable income from the 3rd residence. The own dwelling remains totally exempt from federal income tax.

• Stock options and warrants: introduction of a solidarity contribution from 2025; Limitation of the regime to options relating to the shares of the actual employer; Other options and warrants (not related to the actual employer) are treated as cash remuneration.

• The overall contributions and taxes of banks will be maintained at the same level as of 2025.

• Increase of the tax on securities accounts from 0.15% to 0.30% for the first two years of the legislature, followed by a reduction to 0.25% in 2027 and 2028 and finally again to 0.15% in 2029. This tax is applicable per beneficiary.

Objective: closely collaborating with European and international partners to strive for a greener taxation to accelerate the transition to a low-carbon economy and at the same time creating a level playing field for enterprises in the whole of Europa. The Government will also engage itself to increase European cooperation to address cross-border tax evasion.

• Implementation of the international agreements on a digital tax. Unilateral introduction from [2028] of a digital advertising tax in the absence of an agreement at European or international level.

• Belgium will fully cooperate with the OECD initiatives for a fairer taxation.

• One point of contact per taxpayer for all tax inspections and/or ongoing disputes or questions.

• Mandatory publication by the tax authorities of all case law in which they are involved.

• Simpler and more streamlined tax audits through standard reporting.

• Reinforcement of legal certainty through publication of administrative circulars shortly after the publication of new legislation. Commitment of the government not to enact retroactive legislation.

• Further standardisation of procedures and deadlines for direct and indirect taxes.

• Restoring of the level playing field between the taxpayer and the tax authorities.

• Relaunch of “horizontal supervision” and granting of certain benefits for participating companies. Account management will be implemented for large enterprises.

• Strengthening of the Ruling Commission and improvement of accessibility for SMEs and individuals.
  

Objective: combatting tax fraud will be an absolute priority for the government.

• Strengthening of the tax administration’s control capacity.

• No automatic sanction but a warning for first errors made in good faith.

• Harmonization of investigation and assessment periods applicable to several types of taxes.

• Acceleration of handling of tax controversy files, within a reasonable timescale.

• Increased cooperation between tax authorities and other relevant authorities (justice, police ...)Clear legal framework for the use of unlawfully obtained probative data.

• One uniform and strict list of tax havens applicable for the entire taxable period.

• Complete abolition of Belgian banking secrecy.

• Reporting of crypto-accounts with the Central Contact Point of the National Bank.

• Introduction of "real-time invoice reporting" for consumer and business transactions (with immediate and automatic transmission of VAT data to the administration). An exception will be made for small businesses and self-employed.

• Agreements with other countries on the automatic exchange of information.

• Leveraging Data Mining and Risk Detection.

• Tackling abuse of internal capital gains regime and share deals by further clarifying the concept of 'abnormal management of private assets'.

• Amendment of legislation on the UBO register to reduce administrative burden.

• Tackling unfair competition between the not-for-profit sector and the for profit one by reinforcing the existing direct tax legislation and increasing its transparency.

Objective: customs processes must be faster, simpler, and digital to reinforce the competitiveness of our harbours and logistic centres.

• Customs processes: faster, simpler, and further automation and digitalisation.

• Reform of the prosecution policy and customs criminal law with a focus on the "customer".

• Improvement of the status of Authorised Economic Operator (AEO).