Dividend Received Deduction

• The program law aims a participation with an acquisition value of at least EUR 2,500,000 which, if this company receiving the income is not a small company, is in the nature of financial fixed assets

• There is no increase in this threshold, despite initial considerations to raise it to EUR 4 million.

• There is a new requirement that the participation must have the nature of a financial fixed asset. This requirement is only applicable to distributions made to shareholders that do not qualify as small companies.

• These changes will come into effect in the tax year 2026. Any change to the year-end date after 3 February 2025, which is not driven by non-tax motives, will not be opposable.

Carried Interest

• Carried interest refers to part of the profit of a carried interest vehicle attributed to an individual (or a related person) who is directly or indirectly rendering professional services to this vehicle to the extent it exceeds what an investor receives who does not render professional services for the vehicle.

• The type of distributions, whether interest, dividend, capital gain, repurchase of shares, liquidation bonus, etc., is irrelevant. Revenue from the disposition of carried interest rights is included, calculated as the price received minus the acquisition price, with no costs deductible.

• Co-invest is not within the scope, meaning it is proportionally not more than what a third-party investor receives. Revenue from the exemption to bear part of the management fee is exempt from the carried interest definition and is assimilated with co-invest. Revenue from shares acquired following an option exercise under the Law of 26 March 1999 does not fall within the scope of the carried interest regime.

• Carried interest will be considered for the assessment of whether the marital coefficient should be applied. The marital coefficient is not applied if it is not to the benefit of the taxpayer. It will also be considered for the assessment of which taxpayer (if taxed jointly) should receive additional tax-free sums. Furthermore, it will be taken into account for instances foreseen by article 413/1 ITC where the payment of taxes can be spread over time.

• The definition of a carried interest vehicle is based on the definition of an alternative institution for collective investments (AIF): a Belgian or foreign institution for collective investment, including its investment compartments, that (i) collects capital from a series of investors to invest it according to its investment policy in the interest of its investors and (ii) does not meet the conditions of Directive 2009/65/EG or, for institutions not established in the EU, the conditions of a similar regulation as Directive 2009/65/EG. Only distributions by such Belgian or foreign vehicles are within the scope of the law.

• The qualification of the income is movable income, taxed at a flat rate of 25% without the application of communal taxes unless the progressive tax rates are more beneficial. There is no re-qualification possible as professional income based on art. 37 ITC. If carried interest is structured via a corporation, the current regime remains applicable, with the VVPRbis regime at 15% still possible. It is not possible to create a liquidation reserve for companies having parts in a carried interest vehicle if that company’s shareholders are carried interest beneficiaries (=individuals or related persons (in)directly rendering services for the carried interest vehicle), effective from the tax year 2026.

• Tax non-residents are taxable in Belgium on carried interest if obtained or acquired in Belgium.

• Collection is via prelevy, with a prelevy obligation for Belgian vehicles also on parts received from foreign vehicles or in case of complex structures. The entry into force applies to carried interest paid or attributed after the coming into force and is not applicable to vehicles already in liquidation at the moment of the entry into force.

Tax on Securities Accounts

• The program law aims to counter the avoidance of the annual tax on securities accounts in accordance with the recommendations of the Court of Audit. A specific anti-abuse rule introduces a new presumption which applies if, immediately before a targeted action, the total value of the taxable financial instruments in the relevant account exceeds EUR 1,000,000. This presumption targets the following actions:
  • The conversion of financial instruments registered in a securities account into financial instruments not registered in such an account while retaining all other characteristics of the financial instrument.
  • The transfer of part of the securities to a securities account at the same or another financial institution, provided that:
    • The account holder of the involved accounts is the same; or
    • The account holder of the account from which the transfer is made is a co-holder of the account to which the transfer is made.
• The presumption is rebuttable, meaning the account holder can demonstrate, with concrete and verifiable elements, that a transaction is primarily motivated by reasons other than tax avoidance. If no counterproof is provided, the value of the converted or transferred financial instruments is taken into account to determine whether the taxable threshold is still reached and, if applicable, to determine the amount of tax owed. The Memorandum of Understanding (MoU) provides some examples of manifestly opposable actions, such as the splitting of a securities account due to reasons beyond the account holder's control, like divorce or death, leading to the forced division of a securities account. The MoU also gives examples of justifications suggesting that the main objective is actually to avoid the tax, such as claiming that the splitting of a securities account with the same intermediary is done to invest one part in short-term investments and another part in long-term investments.

• New notification obligations require intermediaries or responsible representatives to notify the tax administration of each conversion or transfer during a reference period, no later than the last day of the month following the end of the reference period.

• Failure to provide the notification, as well as delivering a late, inaccurate or incorrect notification, will be punishable by a fine ranging from EUR 250 to EUR 2,500, according to a scale the steps of which shall be determined by the King. In the absence of bad faith, no penalty is owed. In the case of a securities account held abroad for which no liable representative has been appointed, the obligation to notify the administration rests with the account holder.

• These changes will come into force from 29 July 2025, with the new notification obligation required for the first time before 31 October 2025.

Exit Taxation

• Further to the program law, the emigration of a legal entity is treated as a fictitious liquidation of the legal entity for tax purposes. The presumed fictitious dividend is the portion of the company's equity that, pursuant to Article 209 ITC92, is considered as a distributed dividend in corporate tax, reduced by the corporate tax due on the amount and proportionately limited to the part of the distributed profit to which the shares and profit certificates are entitled. This dividend is taxed at a rate of 30%.

• The tax applies to transactions referred to in Article 210, § 1, 4° (transfer abroad of the principal establishment or the seat of management or control of a company), and only to the extent that this dividend relates to assets that, as a result, are no longer used or retained in Belgium. It also applies to transactions referred to in Article 210, § 1, 1° and 1bis (mergers, divisions, and similar transactions) and only to the extent that this dividend relates to assets that, as a result, are no longer used or retained in Belgium. To prevent avoidance, the scope is broader than pure company migrations and applies to all resident shareholders (individuals, corporates, legal entities), as well as non-resident shareholders (non-residents tax).

• Shareholders must report fictitious dividends received in their income tax return, with no withholding tax. Companies must provide individual forms to the shareholders regarding the distributed fictitious dividend. If the company fails to do so, a separate assessment will follow for the company that has relocated the assets abroad, giving rise to a fictitious distributed dividend. The liquidation reserve regime also applies in the case of transactions equated with liquidation that result in a tax as (fictitiously) received dividends. Corporate shareholders will be able to apply DRD to the fictitiously received dividends.

• To avoid double taxation, a tax credit is available for dividends distributed by a company to the extent that the taxpayer has demonstrated that they result from the realisation of the assets that have been transferred abroad, limited to the amount of the fictitiously received dividend by the taxpayer. Shareholders can opt for deferred payment of tax when assets are relocated to an EEA member state that has concluded a mutual assistance agreement with Belgium.

• These changes have come into force from 29 July 2025 and apply to the qualifying transactions that have taken place from that date.

Liquidation Reserve and VVPRbis

• The program law aligns the tax regimes for liquidation reserves with the VVPRbis regime to improve its attractiveness without affecting tax revenues. Reserves created from 1 January 2026 will have a 3-year holding period with a 6.5% withholding tax, resulting in a total effective tax rate of 15%. For reserves that reached the 3-year holding period on 1 July 2025, the following choices will exist:
  • To be distributed after 3 years at the rate of 6.5%, or
  • To be distributed after 5 years at a rate of 5%.
• Non-compliance with the 3-year holding period incurs a 30% withholding tax. The VVPRbis rate of 20% will apply to contributions made no later than 31 December 2025, so the application of this rate will gradually phase out. Only the VVPRbis regime with a three-year horizon is retained, offering a 15% effective reduced withholding tax rate. These changes are applicable to dividends granted or made payable from 29 July 2025 onwards.

Reduced VAT rate for renovation of private dwellings, destruction and reconstruction of dwellings and the delivery of certain forms of fuel

• The scope of the existing 6% VAT for demolition and reconstruction is expanded to supplies by developers, maintaining the existing social benefits. Only dwellings of 200m² or less qualify for the 6% rate.

• A VAT rate of 21% will apply for the installation of a boiler using fossil fuels in the event of a renovation for dwellings older than 10 years.

• These changes have come into force as from 29 July 2025.
  

Abolition of tax increase in the event of good faith

• The abolition of tax increases in the event of good faith means that no tax increase will be applied if the taxpayer acted in good faith.

• There is a rebuttable presumption of good faith in the case of a first offence, allowing the tax administration to demonstrate a lack of good faith. This presumption does not apply to ex officio assessments.

This change applies to tax assessments starting from 29 July 2025. Amendments to assessment and investigation periods – Income Tax & VAT

• The changes to the assessment and investigation periods are not included in the program law.

Tax regularization

• A permanent fiscal regularization regime, informally known as "EBAquinquies," is introduced, offering declarants the opportunity to regularize federal fiscal irregularities to obtain fiscal and criminal immunity.

• This regime applies increased rates for the regularization of fiscal irregularities. For non-prescribed revenues, a levy equal to the normal tax rate is due, increased by 30% (previously, the increase was 25%). Prescribed capital is subject to a levy of 45% (previously, the levy was 40%).

• A separate Flemish legal framework to regularize registration and inheritance taxes is expected, and a cooperation agreement with the Brussels and Walloon regions is still required.

Central point of contact

• Certain officials will have access to the Central Point of Contact for accounts and financial contracts (CPC) of the National Bank of Belgium in the context of the tax on securities accounts.

• Officials of the FPS Finance will be able to consult CPC data for conducting risk analysis for data mining purposes within the data warehouse of the FPS Finance.

• Additionally, crypto accounts, financial data of foreign origin, and gambling accounts exceeding EUR 10,000 will be registered in the CPC.
  

Aircraft boarding tax

• The aircraft boarding tax is increased to EUR 5, effective from 29 July 2025.

Other diverse measures

An important number of measures initially included in pre-drafts versions are not included in the program law:

• Changes to real estate taxation

• Changes to flexi-jobs

• Changes to the tax treatment of alimony payments

• The increase of the net disposable income

• The non-indexation of certain benefits

• The amendments to the tax credit for own resources

• The overall simplification personal income tax through the abolition of diverse miscellaneous tax deductions and exemptions.

• The abolition of the tax credit for development funds (Law of 1 June 2008)