On 17 December 2025 (officially published on the Chamber’s website on 13 January 2026), the Belgian Government introduced a new draft bill to reform personal income tax. As part of these measures, the government aims to reduce the pressure on gross wages for employees and company directors by limiting the conversion of gross wages into benefits in kind to a maximum of 20% of the annual gross salary, effective from the 2027 assessment year (income year 2026).
20% limit – what is it about?
The draft legislation aims to limit the use of lump-sum benefits in kind as part of employees’ remuneration to a maximum of 20% of the annual gross wage.
If this 20% threshold is exceeded, companies will be subject to a specific contribution of 7.5% calculated on the portion of lump-sum benefits in kind exceeding the limit. This specific contribution will be treated as a disallowed expense for the company.
Calculating the excessive lump-sum benefits
Excessive lump-sum benefits will be assessed at the company level, not on an individual basis. Companies must determine whether the total amount of lump-sum benefits in kind provided to all employees exceeds 20% of their combined gross remuneration. Only the excess benefits—that is, the amount exceeding the 20% threshold—will be subject to the 7.5% specific contribution.
Impacted remuneration components
Benefits in kind taxed based on their actual value, as well as social benefits covered by Article 38 of the Belgian Income Tax Code, are excluded from the scope of the new rules. Conversely, benefits in kind taxed on a lump-sum basis under Article 36 of the Belgian Income Tax Code and Article 43, §3 of the stock option legislation of 26 March 1999 fall within the scope.
Accordingly, the following benefits in kind, among others, will be subject to the 20% limit:
- Company cars;
- Stock options taxable at grant under the stock option legislation;
- A home made available free of charge to an employee;
- Free heating and electricity;
- Private use of laptops, phones, internet, or tablets;
- …
It is important to note that a similar rule applies to company directors. However, the penalty differs: the 7.5% specific contribution does not apply to companies; instead, they face the loss of the reduced corporate tax rate of 20%.
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For more insights on this subject, please do not hesitate to reach out to your regular PwC contact, or contact Emmanuel Saporito or Bart Van den Bussche.
