Group contribution (Intragroup transfer)

• The dividend received deduction can be deducted by the recipient of a group contribution from the amount of group contribution exceeding the negative taxable result before the intragroup transfer (limitation moved from art. 206/3, §1, al.8 ITC to art. 206/3, al. 2 ITC (new al. 2)).

• Entry into force: tax year 2026.

Sicav-RDT / DBI-Beveks

• New distinct taxation of capital gains on Sicav-RDT / DBI-Beveks.
  • Applicable to capital gains on Sicav-RDT/DBI-Beveks which are in principle exempt based on article 192 ITC..
  • On shares of (real estate) investment companies referred to in article 203, §1, al. 1, 2° ITC or article 203, §1, al. 1, 2°bis ITC when [dividend] income from these shares was deducted from profits from a previous taxable year based on articles 202 and 203 ITC; Exception: not applicable to private pricaf / privak and foreign EU companies assimilated thereto.
  • Tax rate: 5%.
  • Distinct taxation: applicable even if the company is in a tax loss position. Can be combined with other forms of taxation.
• Belgian withholding tax (précompte mobilier / roerende voorheffing) on dividends distributed by a Sicav-RDT / DBI-Beveks (as defined above) can only be credited for Belgian corporate tax purposes by a Belgian corporate shareholder if the shareholder grants the minimum remuneration referred to in article 215, al. 3, 4° ITC to at least one of its directors.

• Entry into force: tax year 2026 (non-opposability of changes to the year-end date after 3 February 2025 which are not driven by non-tax motives).

Investment deduction

• Abolition of the prohibition to combine the thematic deduction with regional grants/fundings.

• Abolition limitations to the carry forward of excess investment deduction:
  • The (general) ceiling applicable to the effective use of investment deduction carried forward (art. 72, al. 2 ITC and art. 201, §1, al. 4 ITC).
  • The prohibition to carry forward the basic deduction (art. 201, §1, al. 3 ITC) is abolished.
• Corrective provisions, correcting unintended consequences of the new legislation:
  • The increased rate for digital investments is only applicable for SME’s.
  • Taxpayers opting for the application of the R&D tax credit are now only prohibited from using the technology deduction.
• Increase of the thematic investment deduction from 30% to 40% for non SME’s.

• Entry into force:
  • Fixed assets acquired or constituted as from 1 January 2025.
  • Exception: increase of the thematic deduction for non SME’s: applicable as of tax year 2027.

Special tax regime (expats)

• Cost proper to the employer allowance:
  • increased from 30% to 35%.
  • Abolition of the maximum ceiling of EUR 90,000.
  • The minimum gross salary is reduced from EUR 75,,000 to EUR 70,000.
• Entry into force: as from assessment year 2026 (income year 2025)

Flexi-jobs

• Increase of the flexi-job ceiling from EUR 12,000 to EUR 18,000. Amount indexed yearly going forward.

• Entry into force: as from assessment year 2026 (income year 2025).

Car taxation (hybrid company cars)

• Challenges: electrification is not feasible for all employers and employees due to lack of charging facilities, especially in rural areas and city centres.

• Hybrid Vehicles: a new fiscal deduction scheme for hybrid vehicles is introduced:
  • Scope is limited to self-employed individuals with a one-person business subject to personal income tax (not applicable to employees and self-employed company directors).
  • Instead of gradually decreasing over the years, the tax deductibility is fixed for the duration of the lease contract or ownership (purchase).
  • Simplification: formula to determine the tax deductibility for hybrid vehicles no longer includes a coefficient based on fuel type.
  • Deduction up to max 75% for hybrids bought, leased, or rented until the end of 2027.
  • Gradual reduction of the fixed tax deductibility % for PHEV bought, leased, or rented in each of the respective years:
    • 65% for PHEV bought, leased, or rented in 2028.
    • 57,5% for PHEV bought, leased, or rented in 2029.
    • 0% for PHEV bought, leased, or rented in 2030.
  • Low CO2 Emission Vehicles:
    • Vehicles emitting less than 50 grams of CO2 per kilometer can apply a higher deduction rate:
      • Up to 100% for those bought, leased, or rented before 1 January 2027.
      • Up to 95% for those bought, leased, or rented before 1 January 2028 (similar to the regime for EV).
      • If the PHEV changes owner, the new date of purchase, lease or rent will apply to determine which tax regime applies.
• Fuel Costs: According to the current draft, fossil fuel expenses (including CNG, diesel, and petrol) will become entirely non-deductible as of January 1, 2026, regardless of the car type or the date of purchase, lease, or rental. This provision is still under discussion and may be subject to change in the final text.

• Electric Charging Costs: Max 100% tax deductibility for charging costs for hybrid vehicles (same as for EV’s), depending on the tax deductibility percentage determined according to the CO2-formula.

• Anti-Abuse Regulation:
  • Will remain to apply for fake plug-in hybrids bought as of 1 January 2018 and for which the CO2-emission is not calculated according to the EURO 6e-bis norm, the parameters to determine whether a car qualifies as a fake hybrid remain the same (i.e. PHEV with a CO2-emission exceeding 50g/km and/or have a battery capacity of less than 0.5 kWh per 100kg of car weight).
  • The parameter on the CO2-emission for the anti-abuse regulation for "false hybrids" will be increased from 50g / km to 75 g/km for plug-in hybrids bought, leased, or rented and for which the CO2-emission is calculated according to the EURO 6e-bis norm.
  • The same conditions apply for both the determination of the benefit in kind (art. 36 ITC) and the corporate tax deductibility of the company car (art. 66 ITC); i.e. increase of the CO2-parameter from 50 to 75 g/km for plug-in hybrids bought, leased, or rented and for which the CO2-emission is calculated according to the EURO 6e-bis norm.
• Euro 6e-bis Norm: New stricter testing methods for new plug-in hybrid models (PHEVs) brought to market from 1 January 2025 and for all newly manufactured PHEVs from 1 January 2026, leading to higher measured CO2 emissions.

• Grandfathering Clause: Vehicles bought, leased, or rented before 1 January 2018 will have a minimum deduction of 75% from 1 January 2026. Gradual reduction with 5% per year to a minimum of 50% by assessment year 2031.

• Entry into force: as from assessment year 2026.

Real estate taxation

• Abolition of the ordinary interest deduction for loans on properties other than the proper dwelling, including ongoing debts.

• Abolition of the increased interest deduction on properties other than the proper dwelling, including ongoing debts.

• Abolition of the federal housing bonus.

• Abolition of the federal building savings.

• Abolition of additional reduction for joint assessment for mortgage loan contracts concluded before 1 January 1989.

• Abolition of green loan interest reduction. The 1.5% interest subsidy will remain applicable.

• Abolition of energy-efficient housing reduction.

• Entry into force: as from assessment year 2026 (income year 2025).

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

Alimony payments

• Gradual reduction of the deductibility of alimony payments:
  • 70% for payments made as from 1 January 2025.
  • 60% for payments made as from 1 January 2026.
  • 50% for payments made as from 1 January 2027.
• Corresponding reduction in taxable portion for beneficiaries.

• Non-EEA beneficiaries: alimony payments to non-EER residents will no longer be deductible as from 1 January 2025 and will not be taxable in the non-resident tax (i.e. no withholding tax should be processed.

• Entry into force: assessment year 2026 (income year 2025).

Net disposable income (to be considered as dependent)

• Increase of the threshold to EUR 12,000 (indexed amount for assessment year 2026) for all children to promote equal treatment of parents regardless of their living arrangements.

• Living wages: to prevent the dual benefit of receiving living wages and being considered a dependent, individuals receiving living wages or equivalent can no longer be considered as dependent for income tax purposes.

• Doctoral (PhD) Scholarships: doctoral scholarships will no longer be excluded for the assessment whether a PhD-researcher is dependent.

• Entry into force: assessment year 2026 (income year 2025).

Indexation of tax benefits

• Indexation freeze for certain tax expenditures the indexed amount applicable for assessment year 2025 (income year 2024) will apply until assessment year 2030, unless stated otherwise.

• Affected expenses:
  • Exempt first tranche of income from savings deposits, dividends, socially-oriented interest, and amounts of loans via crowdfunding platforms of which the interest income is exempt.
  • Basket for federal long-term savings tax reduction.
  • Tax reductions for acquiring employer shares.
  • Tax reduction for pension savings. 
  • Tax reduction for expenses to acquire an electric vehicle (for assessment year 2026 – see further).
  • Tax reduction for expenses for a development fund (for assessment year 2026 – see further).
  • Tax reduction for donations.
  • Tax reduction for domestic servant (for assessment year 2026 – see further).
  • Tax reduction for expenses in an adoption procedure (for assessment year 2026 – see further).
  • Tax reduction for premiums for legal assistance insurance (for assessment year 2026 – see further).

Tax reduction for low energy houses, passive houses and zero energy houses.

• The freeze is recorded with a coefficient of 1.6325 applied for assessment years 2026 to 2030. Indexation resumes from assessment year 2031 without catching up for the frozen period.

• One time non-indexation for exempt commuting expenses other than with public transport or collective transport organized by the employer.

• Permanent non-indexation of the maximum amount of the tax credit for children at charge at the level of assessment year 2025, i.e. EUR 550. 

Amendments to the tax credit for own resources 

• Increase of the tax credit from 10% to 20% and from EUR 3,750 to EUR 7,000.

• Entry into force: as from tax year 2026.

Simplification personal income tax

• Abolition of the tax benefit for contributions made to PC Private Plan as from 1 January 2026 (i.e. for contributions made after 30 September 2025). Grandfathering rules for old PC Private Plans are abolished as well.

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

• Abolition of the following tax reductions/exemptions as from assessment year 2027:
  • for capital losses incurred during the complete distribution of the private privak's capital.
  • for expenses to acquire an electric vehicle.
  • for expenses for a development fund.
  • for expenses to buy/install charging station – the reduction is only granted for expenses incurred until 31 August 2024.
  • for wages of a domestic servant.
  • for expenses incurred in an adoption procedure.
  • for legal assistance insurance premiums. 
  • exemption for capital gains on company vehicles. Exemption will be limited to gains realised by 31 August 2025.
  • exemption for social passive: no new exemptions granted for wages after 31 August 2025 for employees meeting the 5-year seniority requirement and gradual phasing out to mitigate retroactive effects on acquired rights.
  • exemption for additional personnel and internships.
• Decrease of the tax reduction for donations to charity from 45% to 30% starting from assessment year 2026.

• Entry into force: as from assessment year 2026, unless otherwise specified.

Amendments to assessment and investigation periods (Income Tax)

• Investigation and assessment deadline for complex and semi-complex tax returns is brought to 4 years.

• Extension of investigation and assessment deadline in case of tax fraud is brought to 7 years.

• Entry into force: immediate (and retroactive) effect as of tax year 2023.

Amendments to assessment and investigation periods (VAT)

• Notification obligation is introduced to apply extended prescription period of 7 years.

• Entry into force: immediate effect on VAT that has become due as from 1 January 2023.