De Wever I – Federal government agreement – Main considerations from a tax perspective

Published

Further to the new Belgian federal government agreement which was reached on 31 January 2025, various new tax measures and related changes can be expected soon. 

Hereafter we will provide you with a (non-exhaustive) overview of the key changes included in said agreement. Note that all of these announced measures can still be subject to changes and require legal enactment.

What has been decided?

Based on a first reading of the federal government agreement (we will provide further details in the near future), the following topics are amongst others part of the tax reform:


Corporate income tax

  • Various changes are to be expected to the DRD (‘dividends received deduction’) regime whereby the regime would be converted into an effective tax exemption and – at least for non-SMEs – an increased threshold (from EUR 2.5 mio to EUR 4 mio) with regards to the so-called participation condition would be implemented together with the additional requirement that the investment has to qualify as a financial fixed asset. The foregoing changes only apply for companies that don’t have a 10% participation in the subsidiary. The other conditions of the DRD regime remain of course also in place.
  • The “SICAV RDT/DBI BEVEK” regime would remain applicable, but a 5% tax would be applied on the capital gain upon redemption. In addition, and in order to be able to set-off the withholding tax on dividends from such an investment, the company needs to comply with the new minimum remuneration to be allocated to its company director (see below).
  • The conditions to benefit from the group contribution regime would be softened, whereby also indirect shareholdings as well as companies which have not yet met the former 5 year holding period requirement may benefit from the regime.
  • The bank contribution would remain at the same level as in 2025.
  • The government will examine how, in accordance with the recommendations of the Court of Auditors, to combat the evasion of the annual tax on securities accounts. The rate of 0.15% would not be changed.
  • The private pricaf/privak would be amended in a more attractive manner.
  • The disallowed expenses regime would be reviewed to evaluate if it would be possible to introduce an optional (simplified) system to replace the current complex calculations.
  • Non-utilised investment deduction may be carried-forward without any time limit and the application process would be facilitated for certain categories.
  • Companies will have the opportunity to be recognized as research centers, thereby obtaining the certainty of a stable long-term fiscal legal framework.
  • Accelerated depreciations would again be possible for certain investments/assets, such as investments in R&D, defense and energy transition.
  • The liquidation reserve would be harmonised as much as possible with the VVPRbis regime (whereby the waiting period would be reduced from 5 to 3 years, but the withholding tax rate would increase from 5% to 6,5% in case of distribution after 3 years).
  • A new system to encourage (sustainable) investments would be introduced.
  • Share deals concerning real estate companies will be subject to additional scrutiny.
  • Specific measures regarding the usage of private foundations and non-profit organisations would be implemented from an (anti-) abuse perspective.
  • A migration of a Belgian company would be treated as a fictitious liquidation of the legal entity, whereby the deemed liquidation dividend would be subject to withholding tax.
  • In case reference is made to the so-called tax havens, legal certainty will be increased by referring to the list of tax havens as available per 1 January of the corresponding year (without taking changes to said list during the year into account).
  • The UBO legislation will be amended in order to reduce administrative burden (and related costs).
  • The decision-making autonomy of the Ruling Commission will be maintained, but the functioning and appointment procedure of the college members will be reevaluated
  • The government will further investigate how to simplify the applicable withholding tax procedures
  • Belgium continues to adhere to the OECD / EU Tax initiatives, but in absence of an international initiative, a so-called digi-tax will be implemented by 2027 on a unilateral basis.

 

Individuals – Personal income tax

From an employer perspective:

  • Reduction of wage costs for low and medium salaries through a cap on employer social contributions and the reduction of energy costs
  • Specific regime for carried interest: 30% tax rate (no impact on existing plans).
  • A legal framework would be implemented with regards to flexible remuneration.
  • Collective bonus regimes would be harmonised, without additional costs for employers or tax burden for employees.
  • The value of meal vouchers will increase and the scope would be extended. All other vouchers (i.e., eco vouchers, culture vouchers, etc.) would gradually be abolished.
  • A more favorable treatment with regards to the tax deductibility of hybrid cars would be implemented, although on a temporary basis.
  • The expat regime would be improved to be more attractive.
  • The copyrights regime would be reviewed whereby digital professions may – again – be able to make use thereof.
  • The mobility budget would be reviewed as well and expanded to all employers.
  • Certain measures will be taken with regards to some exemptions from professional wage withholding tax.

From a general personal income tax perspective

  • Reduction of the personal income tax via an increase of the tax-free (lump sum) amount, the reduction of the special social security contribution and the strengthening of the employment bonus.
  • A solidarity contribution would be introduced on capital gains on financial assets (including investments in cryptocurrencies) at a rate of 10%, subject to various conditions (and exemption).
  • A specific 33% flat-rate for retirees who want to supplement their income will be foreseen.
  • The tax deduction for childcare would be increased for active individuals.
  • Alimony payments would gradually decrease from 80% to 50%. Payments to countries outside the EEA would no longer be deductible.
  • The federal deduction of loan interest for housing other than the main residence will be abolished.
  • The marital quotient will be subject to a phased out regime.
  • Various tax reductions will be eliminated.
  • An exemption for occasional income will be foreseen for transactions below EUR 2 000.
  • Several adjustments for self-employed individuals will be implemented (focusing on e.g. a new deduction to reduce benefits / professional profits, changes to the second pillar of the supplementary pension as well as favourable measures for tax prepayments)
  • The minimum remuneration for company directors would increase from EUR 45 000 to EUR 50 000 and be indexed annually.
  • A new system to encourage (sustainable) investments would be introduced.

Indirect taxes & other taxes or tax measures

  • For demolition-reconstruction projects, the supply at 6% VAT by real estate developers would be reinstated.
  • Clarification of the definition of renovation and reconstruction works for VAT purposes.
  • VAT on heat pumps would be reduced to 6% (instead of 21%) during the next 5 years, but the installation of fossil fuel boilers and the VAT of coal would increase to 21%
  • The “near real-time reporting” will be introduced.
  • Excise duties on tobacco will increase further and new variants and alternatives in addition to traditional tobacco products will be taken into account.
  • Excise duties on zero-drinks, tea and coffee would be abolished.
  • The packaging tax for water, reusable packaging and all products that are significantly more expensive than in neighboring countries will be reduced.
  • An additional airplane tax will be applicable.

What is next?

As indicated before, the above reflects a high level (and non-limitative) summary of the various tax measures included in the federal government agreement only. Additional details regarding most of these measures can be expected in the near future (as these measures will still have to be converted into the applicable laws accordingly).


For more insights on the impact of these possible changes, please do not hesitate to reach out to your regular PwC contact or  join our webinar on 7 February 2025 (Register here). 

Author

More news about
Careers Industries Offices Services Contact us

© 2016 - PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity.
Please see www.pwc.com/structure for further details.