The federal government reached a budget agreement in the early hours of Monday providing for an overall adjustment of €9.2 billion.
Alongside measures aimed at activation and refocusing on employment, the agreement includes a significant set of fiscal and parafiscal provisions, mainly concerning capital income taxation, VAT and various targeted taxes. These measures will take effect in 2028, one year earlier than initially announced.
1. CAPITAL INCOME TAXATION
1.1 Reduction of withholding tax on distributions (VVPRbis)
The VVPRbis regime is once again being tightened. This scheme, which allows small companies incorporated since 1 July 2013 to apply a reduced withholding tax on certain dividends, was recently amended by the Program Law of 18 July 2025.
The budget agreement now provides for an increase in the rate from 15% to 18%. A distribution of €100,000 would therefore be subject to a withholding tax of €18,000, compared with €15,000 under the current regime.
A transitional regime would be introduced: companies already benefiting from VVPRbis would retain the 15% rate for distributions made during the first three years following the reform’s entry into force. New contributions, however, would be directly subject to the 18% rate. This adjustment is part of a broader set of measures targeting “management companies”, already under government scrutiny.
1.2 Annual tax on securities accounts
The tax on securities accounts would be significantly tightened.
Currently set at 0.15% for accounts whose average value exceeds €1,000,000, the rate would rise to 0.30%, effectively doubling it.
2. VAT
The VAT rates of 6%, 12% and 21% remain unchanged, but certain products have been reclassified and move into a different category:
- The rate would rise to 12% for takeaway meals, hotel stays, campsites, and sports and leisure activities.
- The rate for pesticides would shift to the standard rate of 21%.
3. MISCELLANEOUS TAXES
Several other taxes have also been adjusted:
- Excise duties on gas would be increased, while those on electricity would be reduced. This indirectly affects VAT, as excise duties are included in VAT calculations.
- The banking tax would be increased, generating an estimated additional yield of around €150 million.
- A €2 tax would be introduced on parcels originating from non-EU countries, as part of efforts to regulate low-cost online trade.
- The short-haul flight tax would rise to €10 from 2027, compared with the current €5.
- The tax on “guaranteed income” insurance, currently set at 9.25%, would increase to 9.6% as early as next year.
- Finally, the agreement confirms the extension of the copyright tax regime to the IT sector while restricting its benefits. The expense allowance, previously set at 50% for the first bracket up to €19,480 and 25% for the next bracket up to €38,170, would be abolished, meaning the 15% tax rate would apply at source.
