The draft bill reforming personal income tax, submitted to the Chamber of Representatives on 17 December 2025, introduces a significant amendment regarding the minimum remuneration of company directors and, consequently, the conditions for applying the reduced corporate income tax rate.
As from assessment year 2026 (i.e. for financial years closing on 31 December 2025 or later), the minimum annual gross remuneration required for company directors will increase from EUR 45,000 to EUR 50,000.
Reminder of the Principles
The standard Belgian corporate income tax rate is 25% and applies to the company’s entire taxable profit.
However, small companies may benefit from a preferential regime under which a reduced rate of 20% applies to the first EUR 100,000 of taxable profit. Any taxable profit exceeding this threshold remains subject to the standard 25% rate.
What Changes Are Proposed?
- Increase in the Minimum Remuneration Threshold
In order to qualify for the reduced corporate income tax (CIT) rate of 20% on the first EUR 100,000 of taxable profit, the company must grant at least one company director a minimum annual remuneration. This threshold, previously set at EUR 45,000, will be increased to EUR 50,000 per year.
- Introduction of an Indexation Mechanism
A key development is that the EUR 50,000 threshold will henceforth be subject to annual indexation, thereby safeguarding the real value of this condition over time.
- Composition of the Director’s Remuneration
The draft bill further clarifies that benefits in kind (e.g. company car, housing, etc.) may no longer exceed 20% of the director’s total remuneration package. In practical terms, out of the required EUR 50,000, no more than EUR 10,000 may consist of benefits in kind.
The balance must consist of effective gross remuneration.
It should be noted that reimbursements of expenses proper to the employer, copyright income and individual pension commitments are excluded from this calculation.
Is There an Exception?
The draft bill maintains the existing exception whereby the remuneration condition is deemed fulfilled if the director’s remuneration is at least equal to the company’s taxable profit, even where such remuneration is below EUR 50,000.
For example, a company generating a taxable profit of EUR 35,000 may still benefit from the reduced rate provided it grants remuneration of EUR 35,000 to its director.
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In light of these amendments, it is advisable to take this new framework into account when reviewing your remuneration strategy.
The maximum tax benefit derived from the reduced rate – i.e. EUR 5,000 per year on the first EUR 100,000 of taxable profit – must be weighed against the additional tax and social security cost of increasing remuneration by EUR 5,000 or adjusting the level of benefits in kind.
