On 11 December 2025, after extensive discussions within the Finance Commission, the Chamber adopted the draft law providing various provisions.
This legislation encompasses both corporate and personal income tax measures, alongside significant updates to tax procedures.
From a corporate tax perspective, here are the key measures adopted:
- The “Sicav RDT / DBI Bevek” regime remains applicable, but a 5% tax will be levied on the full amount of exempt capital gains, as per article 192 BITC, realized from selling shares of these funds to third parties. In addition, and to set off the withholding tax on dividends from such an investment, the company needs to comply with the minimum remuneration to be allocated to its company director. This regime will be applicable as of tax assessment year 2026.
- The draft law removes the discrimination of applying the group contribution regime in combination with the “Dividend Received Deduction” (or “DRD”) regime.
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Investment deduction: the changes include:
- Unlimited carry-forward of investment deductions.
- Removal of the prohibition on combining state aid for regional purposes.
- Removal of the restriction on the annual maximum amount of carried-forward investment deduction that can be offset.
- Harmonization of increased thematic investment deduction rates (energy, mobility, environment) at 40%, applicable to both small and large companies.
- These provisions apply to assets acquired from 1 January 2025, except for thematic investment deduction rate harmonization, effective from AY 2027.
- Hybrid cars: The definition of ‘false hybrid cars’ is broadened by including cars with CO2 emissions over 75 gr/km (based on the new Euro 6e-bis standard). This rule is effective as of 1 January 2025 and applicable as from assessment year 2026 relating to a taxable period beginning on or after 1 January 2025. Fuel costs will be non-deductible from 1 January 2026 for cars acquired, leased or rented from that date.
- Tax simplification (for companies and individuals): Certain exemptions and advantages will be abolished, including exemptions on capital gains from company vehicles post-31 August 2025 and social liabilities exemptions for remunerations paid or attributed after 30 September 2025.
Employer Perspective Changes:
- Meal Vouchers: The maximum employer contribution to electronic meal vouchers increases from 6.91 EUR to 8.91 EUR.
- Hybrid Company Cars: In addition to the changes mentioned above, the definition of benefit in kind will be adapted to include ‘false hybrid cars’ as per the new standard.
- Expat Regime: An un-capped tax–free allowance within the 35% limit of the total annual gross remuneration is introduced. The base salary for activities performed in Belgium must at least be 70.000 EUR to be eligible. Changes will take effect retroactively from 1 January 2025. For further details, see our newsflash of 15 December 2025.
From a general income tax perspective, the new measures focus on several key areas:
- Hybrid Cars: Starting 1 January 2026, self-employed individuals will face full non-deductibility of fuel costs for hybrid cars acquired, leased or rented from that date. However, hybrid cars obtained between 1 July 2023 and 31 December 2025 will enjoy a transitional regime, allowing up to 75% deductibility based on CO2 emissions, for the duration of the car ownership by the same self-employed individual. Cars emitting a maximum of 50 gr CO2 can benefit from higher deductibility (but max. 100%). Electricity costs remain fully deductible, while fuel costs will gradually decrease to 0% by 2028 (AY 2029). For vehicles acquired from 1 January 2026, electricity costs will follow a degressive deductibility, except for those acquired before 1 January 2027, which remain at 100%. Other costs will be calculated using a formula, excluding fuel factors, with a ceiling applied. Cars acquired between 1 January 2026 and 1 January 2028 will have deductibility up to 75%, with higher rates for cars emitting less than 50 gr CO2. The definition of ‘false hybrid’ will now include cars emitting over 75 gr/km, based on the new Euro 6e-bis standard.
- Flexi-Jobs: The exemption increases from 12,000 EUR to 18,000 EUR starting income year 2025, with annual indexing.
- Dependents: The resource threshold for being considered a ‘dependent’ has been increased to 12,000 EUR.
- Loan Interest Deduction (for other real estates than the own dwelling): This deduction is abolished from fiscal year 2026, effective 1 January 2025.
- Alimony Payments: Deductibility will reduce gradually: 70% in 2025, 60% in 2026 and 50% by 2027. Payments outside the EEA are non-deductible, except for beneficiaries residing in Switzerland.
- Freeze of Tax Reductions or Deductions: Several amounts related to tax reductions or deductions will be frozen from 2025 until 2030.
- Tax Simplification: Various tax exemptions and reductions are abolished, including allowances for long-distance travel, domestic employee salary reductions, adoption expenses, legal protection insurance premiums, and employer contributions for private computer purchases. The tax reduction for gifts decreases from 45% to 30%.
Tax Procedure Changes:
These changes aim to reverse and simplify procedural reforms from 2022. Investigation and assessment periods will be as follows:
- 3 years for standard tax returns (no changes).
- 4 years for late and complex tax returns, further defined in the law.
- 7 years in cases of fraud, applicable to both income tax and VAT (situation as it was before the reform of 2022).
These changes apply from assessment year 2023.
Additionally, the law provides:
- Broader access for designated officials to use CCP data for datamining and datamatching.
- Financial institutions must report balances of crypto-accounts and securities accounts.
- Direct access to CCP by officials in charge of tax on securities accounts in view of verifying the correct application of the provisions regarding this tax. Access by these officials is possible even if no indications of fraud are available and without prior notification to the taxpayer.
The law awaits the King’s signature and publication in the Official Gazette.
