Federal coalition agreement: what do you need to know as a business owner?

The 10% solidarity contribution is a new measure that replaces the capital gains tax previously proposed in the so-called super note (i.e. the earlier draft coalition agreement for negotiation purposes). This contribution is levied on realised capital gains on financial assets, including crypto currencies, and affects investors who sell their assets after the introduction of the measure. It should be noted that only capital gains accrued from the introduction date of this legislation will be taxed, which raises questions about its practical application and the method of determining the taxable part of the capital gain.

There is also a tax-free threshold of EUR 10,000. This means that investors only pay solidarity contributions on capital gains above this threshold. In addition, the previous exemption for shares held in portfolio for more than 10 years has been completely scrapped, meaning that long-term investors are also affected by the measure. However, our new prime minister mentioned that this ten-year period will still be introduced. So taxpayers must wait until the effective legislation arrives. 

Capital losses can be deducted from taxable capital gains to a limited extent, but only within the same year. There is no carryover to future years, which means that investors who only suffer losses in a given year cannot offset them against future gains. This can be particularly detrimental for investors with volatile portfolios.

Entrepreneurs with a substantial interest in companies (at least 20% of the shares) are "always" exempt for the  first EUR 1 million of realised capital gains, ensuring that many small entrepreneurs and self-employed people will be left out of the loop.

Capital gains above this exemption will be subject to progressive taxation: the portion between EUR 1 million and EUR 2.5 million will be taxed at 1.25%, the portion between EUR 2.5 million and EUR 5 million will be subject to a rate of 2.5% and amounts between EUR 5 million and EUR 10 million will be subject to a rate of 5%. Capital gains exceeding the EUR 10 million threshold are subject to a 10% tax.

One of the most striking elements in the reform is the substantial increase in the participation threshold in the context of substantial interest. Whereas previous proposals still talked about a minimum shareholding of 5%, the coalition agreement introduces a threshold of 20%. This immediately raises the question whether shareholders with a participation of less than 20% are completely excluded or whether an exemption may still apply under certain circumstances. The wording in the coalition agreement is ambiguous here: it states that an exemption of the first 1 million EUR "always" applies to participations above 20%, but leaves open whether exceptions can be provided for participations below that threshold.

This raises several concerns, especially in the context of start-ups, scale-ups and SMEs. Many entrepreneurs start with a controlling stake in their company, but as the company grows and external investors join, their shares are diluted by successive rounds of capital. So it is perfectly possible for a founder who initially owned more than 20% to fall below that threshold without changing his commitment or long-term vision for the company. Should that entrepreneur, whose shares are potentially sold only after many years, then be taxed on capital gains while a shareholder with 20% or more is exempt? This seems to create an unintended disincentive that runs counter to the objective of encouraging entrepreneurship. 

Within the ruling coalition, however, opinions differ on this. Some parties argue that those holding less than 20% of the shares fall under the basic system. This would mean that a 10% tax rate would apply, with a foot exemption of only EUR 10,000. MR (i.e. the liberal party), on the other hand, claims that shareholders with holdings below 20% would fall under the incremental rate scale without the exemption up to €1 million. This means - according to MR - that the rate up to €1 million would be only 1.25%. However, this is not explicitly confirmed in the coalition agreement, so the exact scope of this rule still remains unclear.

In addition, the introduction of the solidarity contribution also raises tax questions. How does this solidarity contribution compare with other existing tax regimes on shares? Currently, capital gains on shares can already be taxed at 33% + municipal tax in certain cases (e.g. abnormal management of private assets), or at 16.5% (if a sale is made to a legal entity outside the EEA). The new measure introduces an additional taxation mechanism with no clear delineation from these existing regimes. This risks creating a situation where taxpayers face several overlapping levies, which will create legal uncertainty and administrative complexity. One of the main concerns is that the visibility of realised capital gains will be used by the tax authorities to argue more often that abnormal management has taken place, so that in many cases the tax burden may even exceed the predetermined 10%.

The securities tax, also known as the annual tax on securities accounts, is a tax imposed on securities accounts whose average value of taxable financial instruments exceeds €1 million during the reference period. It is the account itself that is taxed, regardless of whether it is held individually or in undivided ownership. The tax applies both to Belgian residents with a securities account at home or abroad and to non-residents holding a securities account with a Belgian financial intermediary.

The super note initially proposed to increase the impact tax rate from 0.15% to 0.25%. This was eventually not retained in the coalition agreement. So there will basically be no rate increase.

However, the government will examine how avoidance mechanisms can be addressed. Today, there are several techniques by which investors try to avoid the securities tax, such as spreading securities over several accounts to stay below the €1 million threshold. So-called "zero-value structures", where securities are sold just before the reference time, can also be scrutinised. Exactly how the government intends to counter these avoidance strategies is not yet clear, but the signal is clear: the securities tax will not be increased, but it will be made more conclusive.

The proposed reform of the DRD (“dividend received deduction”) deduction to a DRD exemption in the coalition agreement could have significant consequences for companies. Currently, Belgian companies receiving dividends can enjoy a 100% DRD deduction, provided they have a participation of at least 10% or an acquisition value of EUR 2.5 million, and that the participation is held in full ownership for at least one year continuously.

The coalition agreement raises the threshold for the minimum amount from EUR 2.5 million to EUR 4 million for and between large companies. As a result, smaller investments will no longer qualify for the DRD scheme, meaning that companies currently receiving dividends on shareholdings between EUR 2.5 million and EUR 4 million will now have to tax this income. This measure may encourage some companies (which have the necessary resources) to increase their shareholdings beyond the new limit of EUR 4 million to still retain the tax advantage.

In addition to the threshold increase, there will be an additional qualitative condition for participations of EUR 4 million and above and for and between large companies: the participation must be in the nature of a financial fixed asset. However, this condition was removed at the time for being incompatible with the European Parent-Subsidiary Directive. So the question is whether it will hold up this time? That said, this measure means that the company must have a "durable link" with the company in which it invests and the investment cannot be considered a mere investment. This can be problematic for companies acquiring shares with a view to a later sale. Shares held purely as liquidity investments, such as listed shares in portfolios of holding companies and investment companies, will no longer qualify for the DRD exemption as a result. The impact of this change is significant, as holdings that cannot be classified as financial fixed assets may not be tax-advantaged in the future. In principle, this should concern companies investing in listed shares without a long-term commitment.

In addition, the DRD deduction is technically transformed into an exemption. At first sight, this appears to be a purely technical change. The intention is to bring the current regime in line with the European Parent-Subsidiary Directive, which in principle and under certain conditions requires an exemption from withholding tax on dividend payments between parent and subsidiary companies.

The new strictures thus specifically target large companies and the relationships between large companies. They therefore do not apply to SMEs or investors providing capital to start-ups. This means that small companies or large companies investing in smaller holdings could presumably remain under the original DRD regime and not be subject to the stricter conditions. It would also mean that SMEs investing in large companies would also fall outside the scope of the tightening of the DRD scheme. 

The coalition agreement also impacts the favourable regime for DRD Beveks. The government proposes to introduce a new 5% levy on capital gains on exit from a FDI Bevek. In addition, the deductibility of withholding tax from corporate income tax will now be linked to a minimum managerial remuneration of EUR 50,000 (to be indexed). This means that a company receiving dividends from a DRD Bevekwill only be able to deduct the withholding tax paid if it meets this remuneration condition.  

The link to the minimum company director remuneration is a notable addition. This seems particularly aimed at management companies and SMEs, where company directors sometimes consciously opt for lower remuneration in favour of dividends or investments within the company. By making the withholding tax credit conditional on a certain minimum wage, the flexibility of entrepreneurs in their remuneration policy is curtailed. This may particularly affect companies that want to manage their cash flows differently or whose manager only operates part-time.

Carried interest is a performance-based fee that fund managers receive when a private equity or venture capital fund's investments exceed a certain profit threshold. This mechanism serves as an incentive for fund managers to maximise the value of the underlying investments. In practice, this income is often structured as dividends on specific classes of shares (so-called carried interest shares), which are only paid out after a predetermined return to ordinary investors. As a result, the manager bears a higher risk because it receives returns only after other shareholders have achieved a minimum return.

The government wants to introduce a specific and competitive tax regime to boost private equity and fund activity in Belgium. The proposed maximum tax rate would be 30% for movable income from carried interest, with no impact on already existing structures.

It is positive that Belgium wishes to support private equity with a tax framework that provides legal certainty, especially as the sector is in strong international competition with neighbouring countries such as Luxembourg and the Netherlands. The only question is whether it is sufficiently competitive from a tax burden perspective. 

The coalition agreement provides that the emigration of a company will be treated for tax purposes as a notional liquidation. This basically means that if a Belgian company moves its tax domicile abroad, it would be deemed to be liquidated.

In current Belgian corporate taxation, the concept of a notional liquidation on emigration is not new. In principle, when a company moves its tax residence to another country, the taxed reserves and unrealised capital gains on assets are deemed to be realised and subject to corporate income tax. However, what does not happen is that the shareholder of the emigrating company is also taxed, for instance as if he receives a dividend. After all, given the continuity of the legal entity, no distribution or enrichment takes place in respect of the shareholder.

The new measure now seems to want to change this and tax the shareholder anyway. A general exit tax whereby its shareholders are taxed upon transfer of tax residence raises questions of compatibility with EU law. Moreover, there is a risk of double taxation if the host country reincorporates already taxed reserves into its tax base. To avoid discussions with the EU, the measure would potentially be limited to emigrations to non-EEA countries.

To strengthen purchasing power, the social partners are instructed as soon as possible to legally increase the maximum intervention for meal vouchers by two times EUR 2 during the coming legislature.

The tax deductibility of the employer's contribution will be increased in line with this, keeping the measure budget neutral for companies. The spending options of meal vouchers will also be expanded, giving workers more flexibility in their use.

Other existing vouchers, such as eco-vouchers and culture vouchers, will be phased out to promote administrative simplification and transparency of the system. 

The government announced that rules on transfer pricing documentation would be simplified, especially for SMEs. The obligations would be reduced to the essentials, reducing the administrative burden on companies.

However, this raises some questions: What does this reform mean in concrete terms? After all, currently SMEs are exempt from publishing transfer pricing documentation. Does this reform imply that certain SMEs will still be required to prepare documentation, albeit in a simplified form? Or is it merely a relaxation of obligations for certain companies that do fall under the existing rules? 

Another key proposal in the coalition agreement focuses on tackling the use of management companies. De Wever notes that more and more employees, especially executives and white-collar workers, are setting up management companies to gain tax advantages. After all, through such a company, they pay only 20% tax on the first bracket of 100,000 euros, provided the company pays a minimum wage of 45,000 euros gross per year to the manager.

To limit this use, the coalition agreement proposes to raise the minimum wage to be paid to the manager from 45,000 to 50,000 euros. Moreover, it proposes to index this amount, which means that the minimum wage could rise further in the future. This reform should prevent employees from using a management company merely to pay less taxes, without any substantial business operations within that company.

Another measure in the coalition agreement stipulates that company directors' remuneration may henceforth comprise a maximum of 20% of annual gross pay from benefits in kind. This means that entrepreneurs who compensate themselves largely through benefits such as the provision of a home, a car or other benefits must take this into account in their pay structure. However, the question arises as to what is the sanction of not fulfilling this measure. Does it mean that certain favourable regimes (such as the reduced corporate tax rate for SMEs) may not apply if the company manager affords himself the minimum wage but fails to comply with the 20% limit on benefits in kind? Or will there be some other penalty? 

Notwithstanding the ambiguity surrounding the penalties, the measure will result in business leaders having to take at least 80% of their total compensation in cash wages, while a maximum of 20% may be granted via benefits in kind. This will affect business leaders who deliberately take a lower gross salary and mainly compensate themselves with a house, a car or other benefits.

This measure is part of a broader trend with the government imposing more regulation on management companies. Together with the increase in the mandatory minimum wage for company directors from EUR 45,000 to EUR 50,000 and the tightened rules around management fees, this represents a further tightening of the tax space for entrepreneurs.

The VVPRbis regime and the liquidation reserve are largely aligned. The waiting period for the liquidation reserve will be reduced from 5 to 3 years, allowing companies to make dividend distributions more quickly at a reduced rate. At the same time, the withholding tax rate on distributions from the liquidation reserve will be increased from 5% to 6.5% for newly created reserves from 1 January 2026. This increases the effective tax rate from 13.64% to 15%, which corresponds to the rate within the VVPRbis system. 

However, anyone making a distribution within 3 years of construction will remain subject to the regular 30% withholding tax rate.

This means that entrepreneurs will have to wait less time to get their money out of their companies, but will be accompanied by a slight increase in the tax cost. In practice, this brings the scheme closer to the VVPR-bis system, where a 15% RV rate already applies. Also for the VVPR-bis system, the early distributions are taxed at 30% RV, as with the liquidation reserve.

What remains unclear is whether the current regime whereby a final levy of 0% applies upon liquidation of the company will be maintained. If this scheme remains, it may still be interesting to create a liquidation reserve, as a distribution on liquidation would remain more tax advantageous than via VVPRbis.

Another important distinction is that VVPRbis lapses completely on a transfer of shares, while a created liquidation reserve is retained even when the shares are transferred. This may be an important factor in choosing between the two regimes. On the other hand, VVPRbis does remain in place if the company would eventually grow into a 'large' company, whereas the option to create a liquidation reserve is only open to SMEs.

The coalition agreement aims to make Belgium attractive again for international talent.

Belgium already has an expat scheme under which certain foreign employees and company directors can receive part of their remuneration tax-free. This system is now being further relaxed:

• The tax-free allowance will be increased from 30% to 35%, leaving expats with more net savings.
• The €90,000 ceiling disappears, benefiting expats with higher salaries. This makes Belgium more attractive to multinationals looking to attract key profiles.
• The minimum gross remuneration will be reduced from €75,000 to €70,000, making the regime more accessible to a wider group of international professionals.

The current group contribution system (introduced in 2019) allows companies within a group to offset losses (of the current year) for tax purposes against profits of another company within the same group. This system will now be relaxed:

• Both direct and indirect shareholdings are allowed, making the application of the regime broader and more flexible.
• New companies are no longer excluded, which is advantageous for start-ups within a group. Minimum term of 5 years would thus disappear. 
• DRD exemption becomes possible for profits from a group contribution. This means that dividends arising from a group contribution can qualify for the DRD exemption, reducing the tax burden on internal group structures. This is also in line with the European Parent-Subsidiary Directive as opposed to the current provision.

The coalition agreement explicitly states that the federal government will support the regions in their fight against so-called share deals involving real estate companies. In such transactions, real estate is sold indirectly through the sale of shares in a company that owns the real estate, which means that no registration duties are payable. This contrasts with the direct sale of real estate, where registration duties of e.g. 12% in Flanders apply in principle.

The coalition agreement starts exactly from the idea that share deals are a form of tax avoidance, but this view is open to debate. There are many legitimate economic and financial reasons why investors or property companies opt for a share deal rather than an outright property sale. For instance, preserving existing financing structures or ongoing leases can be an important reason to opt for a share deal. 

Moreover, if there are mere tax constructions without economic reality, the tax authorities can already intervene through existing anti-abuse provisions. The question remains how far the government will go in its fight against share deals. Will new legislation be drafted that automatically taxes certain transactions or will existing control mechanisms be tightened? There is also the practical challenge: how do you objectively determine whether a share sale is purely a tax construction, and how do you avoid tax uncertainty for bona fide investors?

First, unused investment deduction will be made transferable indefinitely to future taxable periods. 

The federal government then proposes to abolish the regional attestation requirement for investments in Research & Development (R&D) for the application of the investment deduction. The abolition of this administrative step would greatly simplify the procedure.

In addition, the coalition agreement provides for a covenant between the federal R&D administration and the tax administration. This would enable better cooperation and information exchange so that companies get clarity on their tax treatment sooner. Currently, it happens that the tax authorities have a different interpretation than the competent federal R&D authorities, which creates legal uncertainty. Closer cooperation would reduce the likelihood of disputes and audits and boost companies' confidence in tax incentives for innovation.

An additional measure is the possibility for companies to be officially recognised as research centres. This model is in line with systems where companies enjoy more predictable and consistent tax policies when investing in research and development.

The government plans a clarification of the existing regime on the exemption from withholding tax on profits for R&D employees. The aim is to strengthen legal certainty, efficiency and budgetary control, creating a stable framework for both companies and knowledge institutions.

In addition, the scope of the partial exemption will be revised for research conducted by universities, colleges, university hospitals and scientific research funds. This reform will provide greater clarity on the scope and conditions of application of the measure, reducing misunderstandings and uncertainties in practice.

Based on the current coalition agreement, it may be concluded that the R&D tax incentives will be maintained and administratively simplified. There is also more focus on legal certainty for taxpayers.

The federal government has decided to relax the tax deduction scheme for hybrid cars by introducing a wider transition period. This means that the maximum deductibility of hybrid vehicles will remain at a higher level for longer before being phased out.

Under the new scheme, hybrid cars remain 75% tax deductible until the end of 2027. Then the deductibility will drop to 65% in 2028 and 57.5% in 2029. This gradual reduction runs parallel to the phasing out of the deduction rates for electric vehicles.

An important point is that the deduction rates apply for the entire period of use of the vehicle by the same owner or lessee. At first glance, this means that those who purchase a hybrid car before 2027 can still enjoy relatively high deductibility for many years, even after the general tax rules are tightened.

Fuel costs (petrol or diesel) of hybrid vehicles remain 50% deductible until the end of 2027. Electric consumption costs of hybrid cars, on the other hand, will be assimilated to the deductibility of pure electric vehicles, providing a significant tax advantage for owners of plug-in hybrids.

The government is also planning an exemption scheme for certain hybrid vehicles with particularly low emissions. The details of this are yet to be worked out, but this could mean that high-quality, energy-efficient hybrids will retain higher tax deductibility, keeping them more attractive as tax-advantaged company cars.

The federal government has announced the introduction of a digital tax by 2027 at the latest, in line with international developments. This tax regime targets large digital multinationals that generate significant revenues in Belgium without having a physical presence.

The digitax is a tax on turnover generated by digital companies through online services and platforms in Belgium, without having a permanent establishment here. This type of tax is intended to correct the unequal tax burden between traditional companies with a physical presence and digital players who conduct most of their activities online.

Currently, many large tech companies, such as Google, Facebook and Amazon, pay relatively little tax in Belgium because their profits are made in countries with favourable tax regimes. Following the OECD and EU discussions on digital taxes, the Belgian government wants to prevent further erosion of the tax base and ensure that these companies contribute fairly.

There are thus two possible scenarios:

1. International Digitax (via the EU or OECD)
   • Belgium is initially waiting for an international agreement within the Organisation for Economic Cooperation and Development (OECD) or a European initiative.
   • The EU had earlier plans for a digital tax, but these were put on hold pending a broader international scheme.
   • If an agreement is reached at the international level, Belgium will join this common framework.
2. Unilateral Belgian Digitax from 2027
   • If no international arrangement is worked out by 2027, Belgium will independently introduce a national digital tax.
   • This would mean that digital multinationals would have to pay a Belgian tax on the revenue they generate here through advertisements, digital marketplaces and other online activities.
   • This can lead to conflicts with other countries, as unilateral digital taxes often give rise to trade disputes. 

The reforms within tax procedure focus on more efficient controls, more correct penalty policies and better protection of taxpayers. The examination and assessment deadlines are again shortened and new sanction and arbitration rules are introduced. These adjustments are a return to more balanced deadlines after the previous drastic extensions.

The investigation and assessment periods, which in many cases were extended to 6 and 10 years in the previous legislature, are being shortened again:

• Standard term: 3 years.
• Complex and semi-complex declarations: limited to 4 years (instead of 6 and 10 years).
• Fraud files: shortening from 10 years to 7 years (or 8 years for complex files).

This is a welcome correction, as the extended deadlines were in some cases disproportionate and undermined legal certainty. The shortening provides taxpayers with faster clarity, which is essential for business and investor stability.

However, it does retain the 10-year tax retention obligation, meaning taxpayers are still required to keep their accounts and relevant documents for a decade. 

The Tax Mediation Service will be transformed into a system of tax arbitration. This means that a dispute can be submitted to an independent arbitrator only after the administrative procedure has been exhausted. 

In practice, arbitration may provide a solution to the long processing times in tax courts. How this arbitration procedure will work in practice and whether it will become legally enforceable remains to be seen.

The sanctions policy in tax audits is being reformed and will be more focused on recidivism and malice:

• First mistakes in good faith no longer automatically lead to sanctions but only to a warning. This is in line with recent jurisprudence by the Constitutional Court. 
• The deduction ban in corporate tax will be limited to repeated offences and only when a tax increase of at least 10% is applied. This is a correction to the strict regime that in the past sometimes led to excessive penalties for smaller administrative errors. It does, however, limit the creditability of additional taxable bases. Taxes resulting from an adjustment may only be offset against losses of the same financial year and not against losses carried forward from previous financial years. 

The Central Contact Point for Accounts and Financial Contracts (CAP) will be reshaped in terms of access for the tax authorities. In cases where there are sufficient and precise indications of fraud, the tax authorities can consult the CAP directly after authorisation by an official of the rank of 'adviser general'.

This relaxation raises questions about privacy and the control mechanisms that protect taxpayers. While tax authorities will be obliged to inform taxpayers of the inspection within a month, it remains to be seen whether this provides sufficient safeguards against abuse.

Moreover, the CAP will be further expanded:

• Crypto accounts will require mandatory notification.
• Foreign financial data, which the tax authorities receive via automatic exchange, are integrated into the CAP.
• Online gambling accounts with more than €10,000 will also be included.

In addition, there will be a legal framework for the use of CAP data in anonymous data mining. This means that the tax authorities will be able to detect suspicious patterns through automated analyses and thus conduct more targeted audits. This can help detect fraud, but at the same time raises questions about how this data is used and how misuse is avoided.

One notable measure is that taxpayers who deliberately prevent a tax visit (audit visit) can be imposed a minimum taxable profit. This replaces the existing penalty decision.

The problem here is that a penalty payment can only be imposed by a judge, while the minimum taxable profit can be determined unilaterally by the tax authorities. This can lead to situations where taxpayers are faced with a taxable basis without judicial review that they cannot challenge before an objection procedure is completed.

A new taxpayer charter is being drawn up with the aim of restoring the relationship between tax authorities and taxpayers. This charter should promote transparency and provide greater legal certainty.

In addition, two key legal principles will be enshrined in law:

• The principle of trust: taxpayers cannot be sanctioned for a practice that was previously audited and approved by the tax authorities until the legislation is changed. This provides more stability and protection against tax surprises in audits.
• The antigone doctrine: evidence unlawfully obtained may not be used in tax proceedings. This principle had already been confirmed by case law, but is now explicitly incorporated into law.

The federal government is introducing a new entrepreneur deduction specifically targeted at the self-employed. This initiative is part of a broader strategy to make self-employment more fiscally attractive and reduce the tax burden on small business owners.

The measure should provide for a certain deduction on the first bracket of profits and gains realised by a self-employed person. Specifically, this means that part of the income will be tax-free, leaving self-employed people with a net increase in their earnings.

This deduction is calculated after offsetting tax losses and after deducting professional expenses. This means that first all ordinary expenses and any losses carried forward are deducted, after which the entrepreneur deduction is applied to the remaining amount. 

The exact amount of the deduction is yet to be determined, but it is anticipated that it will be increased by 2029.

The marriage quotient is a tax benefit that can be granted between married couples and legal cohabitants. This mechanism ensures that up to 30% of the professional income of the spouse with the highest income can be transferred for tax purposes to the spouse with little or no professional income (with certain limitations). 

Since Belgium has a progressive tax system, the marital quotient offers a significant tax advantage. It lowers the tax rate for the spouse with the highest income, while the income transferred to the spouse with lower or no income is also taxed in a lower tax bracket. This creates an overall tax reduction within the family. However, if the application of the marital quotient would be disadvantageous due to specific circumstances, it is not applied. 

The coalition agreement proposes to halve the marriage quotient for non-retirees by 2029. For pensioners, it foresees an extinction scenario in the sufficiently long term. Indeed, the current system is considered a brake on the second partner's labour participation.

Federal interest deduction on second residences will be extinguished.

This will put a heavier financial burden on second-home owners, as they will no longer enjoy tax benefits on the interest they pay on their loans. This may make owning a second residence less attractive to investors.

It is also notable that the copyright revenue regime will be extended again. However, against a background of a favourable tax regime increasingly used as an alternative wage optimisation in recent years and a rising budget deficit, the copyright tax regime was recently curtailed with effect from 2023. At the time, the legal text and its interpretation caused a lot of ambiguity and the IT sector seemed to be excluded from the further application of the favourable tax regime.

The agreement within the Arizona parties now makes it clear that the scope of the favourability regime would again be extended to the IT sector (the "digital professions"). It is expected that this would be done with an introduction of an explicit mention of computer programmes and software - to be found in Book XI, Title 6 - as copyrighted works. Thus, in this way, the definition would no longer be limited to a reference to the general chapter on copyrighted works in the Economic Law Code and would exclude any discussion of its possible application to the IT sector.

The tax regime would therefore remain as favourable at first sight, i.e. without the previously suggested increase in withholding tax from 15 to 20%. Taking into account the cost allowances (insofar as they remain unchanged), the actual tax burden on the first EUR 20,100 (income year 2025) would thus remain at 7.5%.

The coalition agreement aims to introduce measures to increase employees' take-home pay. For instance, the tax-free allowance will be increased. They are also looking at the special social security contribution (BBSZ). The BBSZ is a parafiscal levy paid by all employees and the self-employed, on top of regular social security contributions. Earlier versions of the super note proposed abolishing this contribution completely, but the final text of the coalition agreement opts for a reduction rather than an abolition. Finally, the social work bonus will also be strengthened. The social work bonus is a reduction in employee contributions to social security, intended to provide a net increase in low wages without increasing wage costs. This bonus works degressively: the lower the gross wage, the greater the reduction. 

We envisage some smaller measures for profit and income earners in personal income tax, such as the abolition of the tax credit for insufficient advance payments from 2026 and this year a doubling of the existing own resources incentive. In addition, a fifth period will be introduced for advance payments by obviously 20 February of the assessment year with a bonus of 0.5 times the basic interest rate specified in Article 165 CIR92.

Following tax reductions, exceptions and exemptions disappear:

- Tax relief in the context of investments in microfinance development funds.

- Tax relief for domestic servants

- Tax exemption for additional low-wage staff and for additional export and integral quality assurance staff

- Increased deduction of professional fees for local mandates

- The tax credit for adoption costs

- Legal aid tax relief

- Tax deduction on donations goes from 45% to 30%. 

- The increased flat rate for distant travel

- PC private plan

- The tax credit for capital losses located following the entire distribution of the assets of a private privak

- Tax relief for electric motorbikes, tricycles and quadricycles

- The increased cost deduction of internship bonus pay

- Finally, the exemption for commuting by car will not be indexed once.

The deductibility of maintenance benefits will gradually drop from 80% to 50%. Benefits to countries outside the EEA will no longer be deductible. 

The flexible pay system will also be legally framed. The government wants to reduce pressure on gross pay by limiting gross pay swaps to a maximum of 20% of annual gross pay. Additional bonuses can still be granted on top of wages. Care will be taken to ensure administrative simplicity.

The government also announced to set out a framework for costs proper to the employer as soon as possible.

Students earning one euro too many today risk not being dependents of parents, forcing both parents and students to pay taxes and jeopardizing certain benefits (e.g. child allowance or scholarships). Therefore, immediately, the tax exemption for income from student work will be doubled and the maximum amount of net living resources will be increased to 12,000 euros for everyone.

The ambition is to ensure, for the lowest wages, that it always pays to work rather than to receive state benefits. The difference should be at least €500 net per month. 

The principle of automatic indexation of wages, whereby wages rise with the evolution of the cost of living, is maintained. With a view to reforming the system of automatic indexation, the social partners (this is unions and employers associations) are requested to prepare an opinion on this issue by the end of 2026, as well as on the wage norm law (law of 26 July 1996). 

The higher minimum wages already included in the previous intersectoral agreement will be implemented. The guaranteed minimum wage, currently set at €2,070.48 for all sectors, would be increased however without any increase in the wage cost for the employer. 

In addition, the ceiling on the value of one meal voucher would be increased from €8 to €12, the meal voucher could be used more widely as a means of payment. To compensate or mitigate the extra cost for companies, there would be a wider tax deduction. Other vouchers, such as eco-vouchers, consumption vouchers, sports and culture vouchers, would also be phased out.

The dismissal rules will be adjusted but not fundamentally changed. After all, this had been significantly adjusted in 2014 with the unitary statute (“eenheidsstatuut/statut unique”) anyway. What is now additionally provided for: 

• With the introduction of the unitary statute in 2014, the probationary period was also abolished, it would now be reintroduced to allow employer and employee to say goodbye to each other for the first 6 months with a short notice period of one week if the cooperation proves unsuccessful after all. Now, although the notice period is graduated according to seniority, from 3 months' seniority onwards, the notice period exceeds the minimum period of one week. 
• For new hires, severance pay or notice period can amount to maximum 52 weeks. 
• Severance pay is being further reformed to get workers back to work faster after a layoff. 
• The protection for union delegates (Act of 19 March 1991) remains but for non-elected candidates (second time candidates), the protection period is reduced to six months. 
• The number of protection indemnities an employee can claim is under review. 

This in itself remains a limited chapter but a few outlines: 

• Right to strike remains but the gentleman's agreement between the social partners should be reviewed by them. 
• The government is asking the social partners to reduce the number of joint committees. 
• The legal protection of trade unions remains for their trade union activities but for their services (advice and assistance in proceedings), it is stressed that they must comply with common rules on financial transparency and legal liability. 

The target group reduction for first hires is a partial exemption or reduction of the employer's social security contribution (NSSO) on the gross salary granted to start-ups hiring their first, second or third employee. The measure was already largely reduced in recent years. One of the points in the coalition agreement is to further limit the NSSO rebate to €2,000 for the first employee, but still unlimited in time. For the next 2 employees, it would still be a reduction on NSSO contributions from €1,550 to €450, albeit limited in time to be enjoyed during 13 quarters. 

There will be a family credit to simplify and harmonize leave entitlements for parents across systems. 

The introduction of a teleTREINwork system is being looked at, whereby workers using public transport can declare travel time or part of it as time worked. 

SWT (former early retirement) will be further phased out and will only be possible for medical SWT and for collective redundancy or restructuring procedures already initiated. 

Landing job for 55+ remains possible but only for those with a career of 30 years, which will be increased to 35 years by 2030.

The individual training right introduced by the labour deal will remain, but ways to reduce the administration around it are being looked at. The "federal learning account" is to be revamped. 

Belgian regulations around working hours are particularly complex. The strict rules around night work, have resulted that logistic activities for the booming e- commerce sector are often organized outside Belgium. That is why the new government wants to make the regulations on night work less strict. The ban in principle on night work will be abolished and, for the distribution sector, the time at which "night" applies would start at midnight instead of 8pm. This would allow more flexibility until midnight. 

Working hours would also be annualized for all sectors and joint committees (viewed on an annual basis), allowing more to be worked at certain times of the year and less at others. 

Regulations on opening hours will be changed and the mandatory closing day will disappear. 

Companies are given more freedom to determine working hours by mutual agreement within the European rules. 

Obligations around part-time work are simplified: 

• The requirement that a part-time job must be at least 1/3° of a full-time one will disappear 
• If the rules on flexibility are included in the work rules, it is no longer necessary to include all deviating hourly schedules

More flexible options around temporary or permanent transfers to other employers are being examined. 

Students will be able to work 650 hours a year structurally as from the age of 15. 

The use of flexi-jobs would be further extended. They are allowed to earn up to €18,000 a year, where applicable the maximum hourly wage is raised from €17 to €21. Sectors would be further expanded, with option for sectors to disallow this expansion for their joint committee after consultation. The ban on full-time workers doing additional jobs as flexi at an affiliated company would be removed. 

In addition, the advantageous system of voluntary overtime often used, especially during and since the COVID pandemic, will be greatly expanded to 360 hours per year (and for the hospitality industry even 450). It is planned for 240 of these overtime hours to be paid net, i.e. without taxes or NSSO. This system aims to partially address the labor market tightness, by giving employers the opportunity to allow their staff to work more.

Where unemployment has been historically low in Belgium in recent years, the figures for the long-term sick are peaking. Activation of this category was already underway during the previous government but is now being further developed: 

• Employers, prevention advisers and sickness funds are encouraged to monitor sick workers closely and look at options to get them back to work sooner. 
• Employers should therefore pursue an active absenteeism policy. 
• After eight weeks of absence due to illness, reintegration options are reviewed, possibly including with other employers. 
• To make employers accountable, they must finance part of the sick pay (30%) for 2 months even after the period of guaranteed pay. This obligation would not apply to SME’s.  
• There was quite a tug of war around the obligation to provide a medical certificate for one day of illness as well. In principle, this was no longer required for 3 such absences a year. This will now be reduced to 2 of such absences. 
• Employees who "relapse" after a period of illness with guaranteed pay are entitled to 30 days of guaranteed pay only after 8 weeks of work resumption. 

The current system of unemployment benefits would be significantly modified. For instance, unemployment benefits would no longer be granted indefinitely over time. How long one is then entitled to benefits will depend on the number of years one has worked. To be entitled to the maximum period of benefits, i.e. 2 years, one must have worked for 5 years. However, there would still be exceptions for workers over 55. 

In addition, every employee would be entitled to resign once by himself after a 10-year career without risking a sanction from the unemployment agency.  However, the right to benefits would then be limited to six months. 

Because of the high wage cost, numerous additional wage benefits have been elaborated or created over the past decades. The intention is to limit this multiplicity.  

The popular system of the nonus collective agreement CBA nr. 90 and profit premium would be simplified. 

The government also wants to limit the total package of fringe benefits in addition to gross pay to 20% of annual gross pay. However, bonuses can still be granted additionally. 

The employee participation system (participation act) is being modernized. 

The aim is to reduce the administrative burden on companies. 

• The annual risk analysis required by the welfare legislation does not have to be carried out annually if the farm's risks do not change. 
• Obligations around part-time work should be simpler. 
• Reporting obligations imposed by European regulations (e.g. CSRD) would be reviewed so as not to create too heavy an administrative burden for SMEs. 
• Social documents retention requirements are under review. 
• Delete start jobs (“startbaanovereenkomst/convention de premier emploi”)requirement. 

The focus in this chapter is mainly on international employment, especially to avoid social dumping. 

• The existing Fair Competition Hotline will be optimized to detect prohibited posting more quickly. 
• Belgian users of foreign staff should be better informed about the risks they face and check whether their subcontractor has the required accreditation (e.g. as an employment agency). 
• The fight against false self-employment and sham employment continues. 
• The existing systems of chain liability among others in the construction and meat sectors are being evaluated. 
• Reporting is also required when leaving construction sites on a daily basis. 
• The tax authorities and the Nation Office for Social Security are working together to better monitor control of days presency on Belgian territory for foreign workers (set at 183-days in international double taxation treaties). 
• The penalties under the Social Penal Code were already adjusted in 2024. They will be further tightened for offences with an aggravating factor (sanction must always be at least 50% of the maximum amount). Surcharges would be increased to 90 (instead of 70). Employers engaged in social dumping would not be able to claim social security contributions rebates as an additional sanction. 

The government agreement refers to a far-reaching pension reform. The reform aims to keep the pension system affordable in the long term. Graduality and respect for acquired rights are central to this.

The structural reform relies on adequate statutory pensions, strengthening the link between effective work performance and the accrual of pension rights, and harmonization between pension systems for employees, civil servants and the self-employed.

The government agreement includes a measure on early retirement. From now on, a worker could retire early once 42 career years of effective work performance can be demonstrated, regardless of whether or not this was in a heavy profession. This allows retirement earlier than the statutory retirement age. 

There are transitional measures for the various specific pension schemes (railways, police...), but the intention is still to equalize as much as possible over time. 

The agreement contains a series of measures on the self-employed status, with the aim of making it more attractive. Among other things, it aims to improve social protection for self-employed workers. Below are some of the proposed measures:

• A partial disability system would be introduced. Sickness benefits would be paid for the hours you are unable to work as a self-employed person.
• The administrative situation of a self-employed person who is incapacitated is frozen to avoid penalties or increases. 
• Consideration is being given to having social security contributions for the self-employed calculated monthly rather than quarterly. However, payment would then still be made on a quarterly basis. 
• The status of self-employed in secondary employment would be improved. 
• For the contributions of self-employed persons to the PSPS (Free Supplementary Pension for the Self-Employed), the maximum portion of annual professional income that the self-employed can contribute to it will be increased from 8.17% to 8.5% from 2026. The self-employed in a secondary occupation would also be able to accumulate rights through the PSPS from that year onwards. 
• The various second-pillar schemes for the self-employed would be reformed and simplified. In the process, the 80% (tax) rule would also be reformed. 

The earlier super memoranda had talked about a rate reform whereby the existing reduced rates of 6% and 12% would be harmonized into a single rate of 9%.  However, there is no trace of this in the coalition agreement. However, some major "VAT yards" can be found in the coalition agreement, climate and sustainability, the real estate sector, creating efficient reporting systems and modernizing the penalty policy.

The supply of heat pumps, currently subject to 21% VAT, could benefit from the reduced 6% rate and this for a period of 5 years. 

However, the standard 21% VAT rate would become applicable to fossil fuel boilers (mazout, gas, etc.) even if the house is older than 10 years. The current 12% rate for coal will be increased to the standard 21% rate.

The FPS Finance will publish a new circular concerning the lump sum deduction of input VAT on company bicycles used both for business and private purposes.. This circular will overcome the difficulty caused by the lack of mileage records for bicycles. 

A company can already today, under certain conditions, donate commercial goods to institutions recognized by the FPS Finance, while retaining the right to VAT deduction. Taking into account the basic VAT rules, this government wants to strengthen the fight against waste and provide tax support for donating goods to people in need. Among other things, the condition "The usual commercial sales period of the good has expired" will be relaxed, the 15-day rule will be replaced in certain cases by a portion of the total life of the food products, and the list of luxury goods, durable goods or non-essential goods currently excluded from this regime will be revised to expand the list of goods that can be donated.

For the construction sector, the scope of the reduced rate for demolition and reconstruction, which was only firmly curtailed since 2024, would be extended again to supplies of reconstructed housing by construction promoters. However, for supplies by construction promoters, the surface area criterion will be tightened from 200m2 to 175m2.

Furthermore, the government has written out some more intentions. It intends to work out a clear definition as regards the distinction between renovation and renewal of buildings. The government is examining how a sustainability condition can be introduced in due course, within the forthcoming European regulations and without increasing the administrative burden.

In order to ease the burden on the SMEs, the government will scrap, adjust, or simplify the daily receipts book, various VAT registers ... delete, adjust, or simplify. This will take into account the existing control possibilities and the information already available to the VAT authorities.  Other administrative formalities such as the nil customer list... will be abolished following the introduction of e-reporting.

The government is to investigate the internationally circulated model of a lottery with VAT receipts to encourage receipt retrieval and reduce tax fraud.

The white cash register (registered cash register – “GKS”) will be introduced throughout the hospitality industry to ensure a level playing field. This will allow a lot of administrative obligations to be removed, such as the obligation to issue delivery receipt.  There will be an extension of the white cash register to sectors which are prone to fraud. A tolerance will be built in for small-scale activities so that they remain outside the scope, the EUR 25,000 threshold will be kept but with a revised calculation method. The government will provide additional support to facilitate the introduction of the white cash register and this policy.

To combat VAT fraud, we will introduce "near real-time reporting" from 2028 for transactions between VAT taxpayers and transactions for which a GKS is used. There will also be a focus on respecting professional secrecy. Here, cash registers and payment and billing systems will be connected to the administration and automatically transmit VAT data. This will mean a significant reduction in administrative VAT obligations for businesses through the abolition of customer listings and will significantly reduce the possibility of VAT fraud as a result of the optimization of data mining and knowledge of control services.

In addition, the taxpayer will no longer have to file a reasoned petition for a first good-faith offence, and the administration itself will check whether the conditions for non-imposition of any penalty have been met.

The principle of reliance will be enshrined in the law, clarifying that taxpayers who have undergone a check on an element in their return and, if the law remains unchanged, continue that practice in a subsequent taxable period will not be penalized in any subsequent check.

The federal government will bet on a modern fine policy on VAT, which will take into account, among other things, the mitigating circumstance that the Belgian Treasury did not suffer any financial loss as a result of the infringement committed. 

Finally, it will be examined whether it would be appropriate, following the Dutch example, to provide for an exemption in case of a so-called 'objective pleading position' i.e., when, based on the current state of case law, it is defensible that the taxpayer has acted correctly.