During the night of 9-10 July, the Chamber of Representatives adopted the draft law reforming the personal income tax regime.
The law introduces changes that are favourable to workers and entrepreneurs, whether acting as self-employed individuals or through management companies, alongside a series of reductions and limitations for other taxpayers. It also contains provisions that will demand attention from employers and self-employed entrepreneurs that organised their professional activities via a personal services company.
Key changes to the personal income tax regime
- The exempt amount will increase gradually over five years. The King will be empowered to adjust this amount so that, after indexation, it reaches €14,450 for assessment year 2030 and €15,600 for assessment year 2031.
- The supplements to the tax-free allowance for one or two dependent children will be gradually increased over assessment years 2027 to 2030.
- The tax reduction for unemployment benefits will be abolished from assessment year 2030. A transitional regime will apply for genuinely single parents with a dependent child.
- The tax reduction for pensions will be phased out gradually.
- The marital quotient (quotient conjugal / huwelijksquotiënt) will be gradually phased out.
- The living wage (leefloon / revenu d'intégration) will, as a matter of principle, be taxable as replacement income.
- Pensioners who wish to earn additional income will be subject to a separate 33% levy on remunerations paid or attributed from 1 January 2027.
- Private transactions that yield no more than €2,000 will be subject to an irrebuttable presumption of normal management of private assets.
- The special social security contribution will become 'single proof'. It will be calculated on an individual basis instead of per household, and reduced for taxpayers taxed individually. The income threshold will be increased, while the percentage applicable to the first bracket will be reduced.
- The tax-related employment bonus (werkbonus / bonus à l'emploi) will be increased to support the lowest wages.
For entrepreneurs acting as natural persons or organised via a company, the law introduces:
- A specific entrepreneurial deduction for self-employed persons without a company. This is a deduction equal to 10% of profits (bénéfices / winst) or gains (profits / baten) after deducting professional expenses and losses. The maximum deduction will be €311 for assessment year 2028 and €415 for assessment year 2030. Certain types of income are excluded. These include income taxed at a separate rate, indemnities compensating in whole or in part a temporary loss of profits or gains, directors' attendance fees (jetons de présence), and profits or gains from activities carried out as an 'assisting spouse/helper' (aidant), among others.
- The abolition of the surcharge for insufficient advance tax payments for self-employed natural persons.
- An increase in the minimum company director's remuneration to €50,000. The minimum remuneration will be subject to annual indexation. These changes enter into force on the day of publication of the law in the Belgian Official Gazette and apply from assessment year 2027.
- A limitation of lump-sum benefits in kind to 20% of gross salary (see below).
- The extension of the copyright royalty's regime to the IT sector (see below).
From an employer's perspective, the following amendments will apply:
- Increase in tax-free voluntary overtime. A permanent regime will allow a maximum of 240 voluntary overtime hours to be exempt from tax. This regime enters into force on 1 April 2026 and applies to hours worked from that date. If remuneration is paid for more voluntary overtime hours than can be exempted, the exemption will be allocated proportionally across those hours. The explanatory memorandum confirms that recovery hours ('heures de relance' / 'relance-uren', i.e. voluntary overtime worked from 1 January to 31 March 2026) together with voluntary overtime under the permanent regime may not exceed 240 hours in total.
- Limitation of lump-sum benefits in kind to 20% of gross salary for employees (and company directors). Lump-sum benefits in kind granted to employees will be limited to 20% of annual gross remuneration, assessed at company level. If the total lump-sum benefits granted to employees exceed this threshold, the excess will be subject to a 7.5% specific contribution, treated as a disallowed expense. Benefits taxed at actual value and social benefits are excluded, but lump-sum benefits such as company cars, housing, heating/electricity and private use of IT devices fall within scope. A similar cap applies to company directors, but the sanction is different: companies risk losing the reduced 20% corporate tax rate rather than paying the 7.5% contribution. The measure applies from assessment year 2027 and enters into force upon publication in the Belgian Official Gazette.
- Extension of the copyright royalties regime to the IT sector. Software will again fall within the scope of the Belgian copyright regime, allowing developers to benefit from the 15% movable income tax treatment where the relevant IP rights are transferred or licensed to a third party for qualifying uses. Copyright income remains capped at 30% of total remuneration, with an overall ceiling of €77,220 for 2026; any excess will be treated as salary. The flat-rate cost deduction will, however, only be available where the taxpayer holds a valid ordinary or plus attestation of work in the arts at the time of payment or attribution.
This new adopted law still needs to be published in the Official Gazette.
For further details or to assess the impact of these new measures, please contact Bart Van den Bussche or Emmanuel Saporito.
Authors:
Bart Van den Bussche, Partner at PwC Belgium
Emmanuel Saporito, Author at PwC Belgium
