The newly formed ‘Arizona’ Government in Belgium has introduced a wide range of fiscal reforms officially aimed at creating a fairer tax system, fostering economic growth, and preventing tax avoidance. In practice, the most significant measure the De Wever Government has in store for taxpayers is the highly debated capital gains tax. But how will it work in practice? In addition to this, several other important reforms are on the horizon.
It is still very early to draw any conclusions, as concrete measures have yet to be finalized. Over the next few months, proposals will need to go through the legislative process before becoming law. Until then, much remains uncertain, and details could still change. The Government Agreement for 2025-2029 consists of more than 200 pages. Due to its length, we are not able to list all planned changes. Below is a consolidated first analysis of the key fiscal measures.
Capital Gains Taxation
1. General ‘Solidarity’ Contribution
- A 10% tax on realized capital gains from financial assets, including stocks, trackers, bonds, and cryptocurrencies. A €10,000 exemption applies for small investors, indexed annually.
- Historical gains would remain fully exempt.
- Anyone who also sold investments at a loss within the same year can deduct these losses.
- This 10% contribution does not exclude the 33% Speculation Tax. If the investment is not considered part of a ‘normal management of your privately held assets,’ the capital gain can still be taxed at 33% (plus municipal tax). Currently, the tax authorities struggle to determine this, but the new reporting requirement would obviously make that a lot easier.
- Notably, the government agreement no longer includes any measure to expand the tax-free allowance on interest and dividends. The feasibility of simplifying the current withholding tax exemptions on dividends and interest may still be examined later on.
2. Capital Gains Taxation for Business Owners
- Gains on participations of at least 20% ownership will be taxed as follows:
| Up to 1 million | 0% |
| 1 million – 2.5 million | 1.25% |
| 2.5 million – 5 million | 2.50% |
| 5 million – 10 million | 5% |
| Above 10 million | 10% |
- Capital losses within the same category fully deductible within the year but non-transferable.
Personal Income Taxation
1. Increased Tax-Free Allowance
The tax-free allowance is the annual portion of income exempt from taxation. The base amount is currently €10,910 (income year 2025) and will be increased to benefit low- and middle-income earners.
2. Dependent Spouse Allowance
If one partner has little or no income, currently a portion of the income (up to €13,460) is transferred to the other partner for tax calculation purposes. This ‘marital quotient’ will be halved for non-pensioners by 2029. For pensioners, a gradual phase-out is planned over the long term.
3. Deductions & Tax Credits Adjustments
- Tax deduction for charitable donations reduced from 45% to 30%.
- Deductible financial support payments reduced from 80% to 50%.
- Immediate abolition of the federal interest deduction for all loans for non-primary residences.
- Abolition of many other tax deductions: domestic workers, legal assistance insurance, long-distance commuting, unemployment benefits, electric motorcycles, adoption costs, and so on.
4. De Minimis Rule for Occasional Income
A €2,000 de minimis threshold will be introduced for occasional income (e.g., second-hand sales). Only profits exceeding this amount, earned outside business activities, will be taxable. The current tax exemption for ‘normal management of privately owned assets’ remains unaffected.
5. Pensioners’ Additional Earnings
Retirees who continue working after a full 45-year career will benefit from a flat tax of 33% on their earnings.
6. Students
Expanded work-hour limits and net income thresholds for student workers.
7. Flexi-Jobs Expansion
Increased annual earnings cap for non-pensioners from €12,000 to €18,000.
Stock Exchange Tax (TOB)
The government aims to simplify the stock exchange tax, applied to the purchase and sale of listed securities. Currently, this tax is not only highly complex but also inconsistent. Concrete measures have yet to be announced.
Securities Tax
The tax on securities accounts remains at 0.15%, despite earlier plans to increase it to 0.25% for accounts exceeding €1 million. The government will explore ways to curb tax avoidance, following a recent audit report revealing widespread evasion. In response, tax authorities have already conducted inspections at banks and financial institutions.
Taxation for SMEs, Entrepreneurs & Business Owners
1. Minimum Remuneration for Company Managers
Raised to €50,000 (indexed annually) to qualify for the reduced corporate tax rate of 20%, up from currently €45,000. For this threshold, benefits in kind may comprise a maximum of 20% of the annual gross salary.
2. Investment Deduction
Can be carried forward indefinitely for unused amounts.
3. Reintroduction of Declining Depreciation Method for SMEs
4. Entrepreneurial Deduction
A new tax incentive for business founders and early-stage entrepreneurs.
5. Abolition of Penalties for Insufficient Advance Tax Payments
Moreover, a fifth period for advance payments will be introduced.
6. Harmonization of VVPRbis & Liquidation Reserve
The VVPRbis system and liquidation reserve will be aligned as much as possible:
- Waiting period for the liquidation reserve reduced from 5 to 3 years.
- Withholding tax rate on new liquidation reserves increased from 5% to 6.5% starting January 1, 2026.
- Effective tax rate on the liquidation reserve will rise from 13.64% to 15%, matching the VVPRbis rate.
- Distributions within 3 years will still be taxed at the standard 30% withholding tax rate.
7. Meal Vouchers
Companies will be able to grant meal vouchers of up to €12, instead of the current €8. Other vouchers, such as eco vouchers and culture vouchers, will be phased out.
Copyright Tax Regime
Following previous reforms, the favourable tax regime for copyright income will be reintroduced to eliminate discrimination between digital professions—currently excluded by tax authorities—and other eligible professions, with a 15% tax rate, a standard expense deduction, and a broad scope of application.
Enhancing Expat Tax Regime
The scope and benefits of the ‘new’ Expat Regime (BBIB/BBIO) will be expanded, with key changes including:
- Increase in tax-free allowance from 30% to 35%.
- Removal of the €90,000 annual cap: As long as the tax-free allowance does not exceed 35% of the total annual gross salary, the regime can be applied without limitation.
- Lowering theminimum gross salary requirement from €75,000 to €70,000.
Corporate Taxation Reforms
1. Annual Corporate (Social Security) Contribution
The contribution would be adjusted based on the total balance sheet, allowing small businesses to contribute less and large businesses to contribute more.
2. Participation Exemption (Dividend Received Deduction – DRD)
This mechanism determines that profit distributions from subsidiaries to the parent company are – under certain conditions – tax-free if they have already been taxed at the source:
- Threshold increased from €2.5 million to €4 million while maintaining the 10% participation requirement.
- Additional conditions for DRD deductions, except for SMEs.
- Changed from a deduction to an exemption.
3. New 5% Levy on Capital Gains
Imposed on gains realized when exiting a DRD-BEVEK, limiting tax avoidance through investment fund structures.
4. Corporate Emigration Taxation
Moving your company away from Belgium will be treated as a deemed liquidation, subjecting undisclosed reserves and unrealized gains to an immediate taxation. This arrangement already exists in practice today but could additionally lead to a deemed liquidation on behalf of the shareholder of the emigrating company and a withholding through the withholding tax.
Pension & Retirement Plans
1. Solidarity Contribution Increase
Raised from a maximum of 2% to 4% for annual pension savings above €150,000.
2. Harmonization of Private Pension Plans
Unification of VAPZ/PCLI, IPT/EIP, and POZ/CPTI schemes. Self-employed individuals will be able to save more flexibly for a supplementary pension.
3. Higher Tax Deductibility of VAPZ/PCLI Contributions
4. Expansion of VAPZ/PCLI
Now includes self-employed individuals in secondary occupations, allowing more workers to benefit from tax-advantaged pension savings.
Anti-Tax Avoidance & Compliance Measures
1. Shortened Tax Audit and Assessment Periods
- Standard audit period reduced to three years.
- Extended audits up to four years for complex cases.
- Fraud-related cases subject to audits up to seven or eight years.
2. Enhanced Real Estate Tax Avoidance Rules
Strengthened oversight to prevent tax evasion through share deals in property transactions. This is quite remarkable. As the transfer tax duty is a regional matter, and only the regions have normally the authority to levy it.
3. Permanent (Para)fiscal Regularization (EBA Quinquies)
The development of a stricter permanent (para)fiscal regularization procedure with a 30% tax on non-time-barred capital and 45% tax on time-barred capital. Currently, there is no longer a tax regularization procedure in place.
4. Stricter Regulation of Tax Advisors
Increased accountability and transparency requirements to prevent aggressive tax planning.
5. Standardized Dividend Withholding Tax Rates
Eliminates disparities across different types of securities, promoting a more consistent and fairer system.
6. Mandatory Filing of Annual Accounts for Nonprofits & Foundations
Streamlined filing processes with reduced administrative burdens for smaller entities.
7. Stronger Regulation of Foundations
Federal oversight to ensure compliance with non-profit objectives.
8. Expansion of Centralized Financial Reporting
Greater transparency for foreign financial accounts and cryptocurrency holdings.
9. Tax Arbitration
The tax mediation service would be transformed into tax arbitration, which can only be invoked once the administrative appeal procedure has been completed.
10. Modernization of Tax Procedures
- Simplification of administrative procedures to reduce compliance burdens.
- Introduction of taxpayer protections for individuals making good-faith errors.
Conclusion
The Belgian Government’s 2025-2029 tax policy introduces broad reforms with a strong emphasis on capital gains taxation and personal taxation, alongside significant corporate and compliance changes.
After more than seven months of negotiations and many draft versions, there is finally a bit more clarity regarding the measures that will be taken in the fiscal field. We are curious about the technical implementation in draft texts expected in the coming weeks and months. Businesses and individual taxpayers should monitor developments closely to optimize their financial planning and compliance strategies.