The 2025 Belgian federal coalition agreement introduces an ambitious tax reform agenda, with implications for investors, businesses, and especially the financial services sector. The reforms are guided by three core principles: simplification of tax legislation, enhancement of international competitiveness, and increased legal certainty for taxpayers. Currently, the government is diligently working on various draft bills (i.a. a draft “Program Law”) to translate the proposed measures into legislation.1
Financial Institutions as Taxpayers
1. DRD and Participation Exemption Regime
The Dividends Received Deduction (DRD) and participation exemption regime are being tightened. For companies that are not classified as “small” and fulfill the participation condition because they hold a participation with an acquisition value of at least EUR 2.5 million, this participation will also need to qualify as a “financial fixed asset” within the meaning of (Belgian) accounting law. The new requirement would apply from income year 2025, with withholding tax changes effective from 1 July 2025.2
2. From Deduction to Exemption
The government also intends to convert the DRD from a deduction to an exemption regime to resolve technical issues and align with EU law. However, this change is not yet included in the draft Program Law.
3. No Changes to Bank and Insurance Levies
The coalition agreement does not propose changes to existing levies on financial institutions, though the government may adjust rates if budget targets are missed.
Financial Institutions as Tax Collectors
1. Withholding Tax Simplification and FASTER Directive
The government plans to simplify withholding tax exemptions and implement the EU’s FASTER Directive by 2030. This introduces fast-track refund procedures and standardized reporting obligations, increasing the compliance burden on financial intermediaries.
2. Capital Gains Tax - Withholding at source for Belgian financial intermediaries
A new capital gains tax is under discussion, requiring Belgian financial institutions to withhold 10% tax on capital gains from, amongst other things, listed securities, necessitating significant IT investments.
3. Other Taxes
No changes are proposed to the Cayman tax, nor to the reduced 15% Belgian withholding tax rate and first tranche exemption for interest from regulated savings accounts.
The coalition agreement foresees, though, a modernization of the tax on stock exchange transactions, to ensure more neutrality across investment products, but this is not (yet) part of the current draft legislation.
Financial Institutions as Data Collectors
1. Expanded Reporting to the CPC
From 1 December 2026, financial institutions must report all securities account openings, closings, and balances to the Central Point of Contact (CPC). Initial reporting will cover balances as of 30 June 2025, 31 December 2025, and 30 June 2026.
2. Data Mining and CPC Access
The CPC would be used for anonymous data mining to select audit files, integrate foreign financial data, and include online gambling accounts exceeding EUR10,000. Financial institutions must ensure data accuracy. However, it is unsure whether this proposed measure will actually be implemented because of a critical advice of the Belgian Privacy Commission (to be followed-up).
3. Annual Tax on Securities Accounts
The 0.15% tax rate remains unchanged, but additional anti-abuse rules are introduced. ‘Suspicious’ conversions of securities on a taxable securities account into nominative securities that are no longer held in a (taxable) securities account or transfers of securities from a taxable securities account to another (non-taxable) securities account, will be presumed abusive unless justified by the taxpayer. Financial institutions will need to report such transactions to the Belgian tax authorities or face fines.
4. UBO Register Access
Financial institutions will gain direct access to the UBO register, reducing administrative burdens for companies.
Direct Impact on Investors
1. Exit Taxation for Shareholders
Exit taxation will apply both at the corporate level and to shareholders when a company migrates abroad. Shareholders must declare deemed dividends in their income tax returns. For intra-EEA migrations, tax deferral over five years is allowed.
2. DRD-SICAV Capital Gains Tax
Investors in DRD-SICAVs will face a 5% tax on capital gains realized through secondary market sales. If the investor does not pay a minimum director’s remuneration, the 30% Belgian withholding tax on dividends will also not be creditable.
3. Capital Gains Tax for Individuals and some Legal Entities
A broad-based capital gains tax is proposed for individuals and some legal entities e.g. not for profit organizations. This tax will in principle apply to all financial asset transfers for consideration, excluding gifts and inheritances. However, the measure is not yet included in the draft Program law (i.e. it is subject to separate legislation).
4. Voluntary Regularization (Tax Amnesty)
A new tax amnesty is proposed, generally in line with the previous one, but with increased regularization tariffs.
5. Specific tax regime for Carried Interest
A new 25% flat tax on carried interest income provides legal certainty and aligns Belgium with neighboring countries. The regime excludes stock options already taxed and funds in liquidation.
Miscellaneous Measures
1. Expatriate Regime Enhancements
To attract international talent, the expat regime will be improved by:
- Lowering the salary threshold from EUR 75,000 to EUR 70,000; and
- Increasing the tax-free allowance from 30% to 35% of the gross salary and removing the EUR 90,000 cap.
2. Copyright Tax Regime for IT
Though not yet included in the draft legislation, the favorable tax regime for copyright income would (again) be extended to include software developers.
Conclusion
The 2025 coalition agreement marks a significant shift in Belgian tax policy, especially for financial institutions and investors. While the abovementioned measures are still in draft form, the direction is clear: increased transparency, broader tax bases, and enhanced compliance obligations. Financial institutions must prepare for substantial operational and IT system changes to meet new requirements.
- This Tax Flash is based on our interpretation of the information we currently have, which is subject to change.
- This stricter condition would also apply to exemption from Belgian withholding tax exemption for dividends paid by a Belgian subsidiary to a non-Belgian shareholder (also known as the “Tate & Lyle exemption”). This means that the participation would also need qualify, by analogy with Belgian accounting law, as a financial fixed asset.
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