I. Introduction
Remunerating a company director or manager has always required a balance between corporate tax, personal income tax and social security contributions. That balance is becoming more delicate.
Belgium combines a high tax burden on labour with a corporate income tax system that still offers a reduced rate of 20% on the first EUR 100,000 of taxable profit, provided certain conditions are met. The key practical question is therefore not whether salary, benefits, dividends or management fees are “best” in the abstract. The question is how they interact in a given remuneration package.
The draft reform of personal income tax adds another layer. It targets the conversion of cash remuneration into benefits in kind and strengthens the importance of correctly calculating, documenting and reporting the remuneration package.
II. The minimum remuneration: useful, but not always decisive
A company that seeks access to the reduced corporate income tax rate must generally grant a sufficient remuneration to at least one individual company director or manager. The current EUR 45,000 threshold would become EUR 50,000 under the draft reform, with indexation.
This remuneration condition is important, but it should not be treated as an automatic salary target. The reduced corporate tax rate of 20% applies only to the first EUR 100,000 of taxable profit. The corporate tax saving is therefore capped, while any additional remuneration is taxable in the hands of the manager and may also trigger social security contributions.
The relevant question is consequently not whether the threshold can be reached, but whether reaching it is still advantageous after taking into account the manager’s personal tax cost. In some cases, increasing the remuneration will produce a clear net benefit. In others, the additional personal income tax and social security contributions may absorb a significant part of the corporate tax saving.
The remuneration condition also requires attention from a formal perspective. A mere accounting entry is not necessarily sufficient. The remuneration must be properly granted and borne by the result of the taxable period. Depending on the circumstances, the relevant remuneration may include ordinary directors’ remuneration, certain bonuses, benefits in kind, personal social security contributions borne by the company, tantièmes and certain recharacterised rental payments.
Example
A company expects a taxable profit of EUR 105,000. The manager has already received EUR 45,000 in remuneration and has no other income that year. The company is considering granting an additional EUR 5,000 so that the manager’s remuneration reaches EUR 50,000.
Without the additional remuneration, the company does not meet the remuneration threshold. Its taxable profit of EUR 105,000 is taxed at the ordinary corporate income tax rate of 25%, resulting in EUR 26,250 of corporate tax.
With the additional EUR 5,000 remuneration, the company’s taxable profit decreases to EUR 100,000. If the company then qualifies for the reduced corporate income tax rate that profit is taxed at 20%, resulting in EUR 20,000 of corporate tax.
At company level, the difference is therefore EUR 6,250 less corporate tax.
The additional EUR 5,000 is not, however, a net amount for the manager. On simplified assumptions, the additional remuneration results in approximately:
- Additional gross remuneration: EUR 5,000
- Additional social security contributions: EUR 851
- Additional personal income tax, including municipal tax: EUR 2,007
- Net additional amount for the manager: EUR 2,142
The overall benefit is therefore not EUR 6,250. After taking into account the manager’s additional personal tax and social security cost, the combined immediate advantage is approximately EUR 3,392.
The practical conclusion is that the remuneration threshold should not be applied automatically. Even where increasing the remuneration produces a positive result, the real advantage depends on the manager’s personal tax position and should be calculated case by case.
III. Tantièmes as a year-end correction tool
A tantième can be a useful instrument where the company’s profit is higher than expected and the remuneration threshold has not been met.
From a corporate tax perspective, a tantième is not treated like a dividend. It is a profit allocation to a director or manager that can be deductible for the company and can count toward the minimum remuneration condition. This makes it a practical tool for year-end planning.
However, a tantième is not cost-free. It must be reported on the appropriate tax fiche is subject to withholding tax, is taxable in the hands of the manager in the year of effective grant and counts for social security purposes. It also does not necessarily produce the same pension consequences as ordinary recurring remuneration.
In practice, tantièmes are best used as a correction mechanism, not as a substitute for a coherent annual remuneration policy.
IV. Benefits in kind: the 20% rule changes the analysis
Benefits in kind remain relevant in manager remuneration. Company cars, IT equipment, housing, heating and electricity, favourable loans, smartphones and stock options can all form part of the package.
The draft reform, however, limits the use of lump-sum benefits in kind as a substitute for cash remuneration to a maximum of 20% of the total gross remuneration. For company directors and managers, the consequence of exceeding this 20% threshold is particularly severe: the company may lose access to the reduced corporate tax rate.
The calculation is practical and mechanical. The lump-sum benefits in kind are compared with the total gross remuneration reported on fiche 281.20. If the lump-sum benefits exceed 20% of that amount, the threshold is exceeded. The calculation is made by category, not individually. Exempt social benefits are excluded from both the numerator and the denominator, while benefits valued at their actual value are included only in the denominator.
Example
A manager receives EUR 50,000 in cash remuneration and a company car with a taxable benefit of EUR 10,000. The benefit represents 20% of the cash remuneration.
If the taxable benefit increases to EUR 11,000, for example because of a change in the car’s valuation, the balance of the package changes. The company may suddenly face an adverse tax consequence even though the remuneration policy itself has not changed.
This makes the annual review of benefits in kind essential. The package should not only be checked when a new benefit is granted. It should also be reviewed when the lump-sum value of an existing benefit changes, for example because of changes in car taxation or reference values.
V. Cost reimbursements: efficient only if properly evidenced
Reimbursements of costs proper to the company remain a useful remuneration-adjacent tool. They are not taxable remuneration when they genuinely reimburse costs that should be borne by the company.
The core evidentiary rule is simple but strict: the company must be able to prove both that the reimbursement relates to costs proper to the company and that it was actually used for such costs.
There are three categories on the tax forms:
- reimbursements based on supporting documents;
- lump-sum reimbursements based on certain standards (examples of certain standards include certain official kilometres, travel and homeworking allowances, or amounts confirmed through a ruling); and
- lump-sum reimbursements not based on certain standards.
In practice, this calls for a clear internal policy. The company should define which expenses are reimbursed, whether reimbursement is based on invoices or a lump sum, how double reimbursement is avoided and how the amounts are reported on fiche 281.20.
This is especially relevant for homeworking allowances, travel expenses, representation expenses and Bring Your Own Device arrangements. These items may be perfectly defensible, but they become vulnerable when the lump sum is undocumented, applied too broadly or combined with reimbursement of the same cost on the basis of invoices.
The company should be able to show:
- which costs are covered;
- why they are company costs;
- how the amount was calculated;
- whether the reimbursement is based on supporting documents or by a lump sum;
- that the same cost is not reimbursed twice.
Lump-sum reimbursements are not necessarily problematic, but they require a serious basis. A vague monthly allowance without explanation is vulnerable in an audit.
VI. Management companies: invoices are not enough
Where a manager works through a management company, the focus should be on substance.
A written management agreement and monthly invoices are useful, but they are not sufficient on their own. The management company must be able to demonstrate that real services were performed and that the fee is commercially justified. A strong file will usually include:
- a clear management agreement;
- invoices with specific descriptions;
- board minutes or management reports;
- emails, presentations or other deliverables;
- evidence of strategic, financial, commercial or operational work;
- an explanation for the amount of the fee;
- consistency between the services performed and the fee charged.
Example
An invoice stating only “management services, EUR 15,000” is weak, if not supported by a management agreement that defines those services. An invoice that refers to specific strategic meetings, commercial negotiations, financial reporting, operational follow-up or project management is much stronger, especially if those services are supported by emails, minutes or reports.
The tax risk is not limited to whether a management company exists. The real question is whether the management fee corresponds to actual, provable and appropriately priced services.
VII. Do not forget account-current and interest issues
The remuneration package should also be reviewed together with current-account positions. Which is too often not done.
Where a manager lends money to the management company or leaves funds in a current account, the interest paid by the company should be reviewed carefully. Excessive interests can be challenged and, in certain cases, recharacterised as a dividend.
The same attention is required where the funds are provided by a related person, such as a spouse or family member. The interest rate, the amount of the advance and the relationship between the parties should all be checked.
This is particularly relevant in groups where the manager wears several hats: shareholder, director, fixed representative, creditor and service provider.
VIII. The remaining profits – Dividends and pension planning
Once an appropriate level of remuneration has been determined, the remaining profits can be dealt with separately.
Depending on the company’s situation, dividends, VVPRbis, liquidation reserves or supplementary pension contributions may be relevant. These techniques serve different purposes.
Dividends are useful for profit extraction but are paid out of after-tax profits. Supplementary pension contributions may be attractive for long-term planning, but they are subject to specific limits. Liquidation reserves and VVPRbis can reduce withholding tax, but only if their conditions and timing are respected.
The mistake is to look at each technique in isolation. Salary, benefits, cost reimbursements, dividends and pension planning should be assessed together.
IX. Conclusion
Director/Manager remuneration in 2026 requires a broader review than in the past. The focus should not be limited to one threshold or one tax rate.
Cash remuneration remains the foundation. Tantièmes can correct the position at year-end. Benefits in kind remain useful, but they must stay proportionate. Cost reimbursements are efficient only if they are genuine and properly documented. Management fees can still be used, but the file must show real services and a defensible fee. Current-account interest, dividends and pension planning should also be included in the review.
The practical message is clear: the best remuneration package is not necessarily the one with the lowest immediate tax cost. It is the one that remains efficient, coherent and defensible when all components are examined together.
Authors: Alexis Ceuterick & Rik Strauven (Simont Braun)
