Favourable tax regime for copyright in the IT sector: the phoenix rises again!

The favourable tax regime for copyrights underwent a thorough reform as of 2023. Following a legal battle by the IT sector, the Constitutional Court confirmed in May 2024 that digital professions within this sector were excluded from the scope of the new regime. As a result, this important professional group could no longer benefit from this favourable tax regime.

However, as previously announced in the federal coalition agreement – and recently confirmed in the summer agreement – this tax “phoenix” is set to rise from the ashes. The summer agreement confirms the reintroduction of the copyright tax regime for the IT sector.

According to the preliminary draft, the regime is expected to be reintroduced as of 1 January 2026. The proposed modalities provide for an extension of the amended 2023 regime to digital professions in the IT sector. This also means the possibility to exempt copyright remunerations from social security contributions.

At KPMG, we have extensive expertise in the IT sector. We are closely monitoring these developments and are bringing this message to your attention now, so that your company – while awaiting the final legislation and entry into force – has sufficient time to prepare for the concrete implementation.

Belgium is known for its high tax burden on salaries, with employees’ wages quickly reaching the top personal income tax bracket of 50%. On top of this, social security contributions are also due. The copyright tax regime offers a valuable remedy for creative professionals, allowing them to transfer (or license) their copyrights to clients in exchange for favorably taxed remuneration.

Copyright remunerations, classified as movable income, are subject to a flat tax rate of just 15%. Combined with general lump sum expenses, the effective tax rate is even lower. Until the recent reform of 2023, employees were also required to pay social security contributions on these amounts.

For many years, this regime formed an integral part of the salary package in the traditional software sector, as well as in creative industries such as fashion and gaming. In tax practice, it was generally accepted - often via tax rulings - that up to 25% of the salary package could be paid as copyright remuneration.

As of 2023, the copyright tax regime was thoroughly reformed, with the intention of returning to its original objective: providing an appropriate tax regime for irregular and volatile income from artistic activities. Several additional conditions were introduced. The material scope was limited to copyright and neighbouring rights, but the reference to computer programs and databases was cancelled. The tax law also introduced an exploitation requirement: the protected works transferred or licensed must be exploited. The personal scope was also adjusted, with natural persons gaining access via an “artwork certificate.” In the absence of such a certificate, the regime can also apply to individuals who transfer or license their copyrights to a third party for public communication, performance, or reproduction.

In addition, the social security regulations were aligned with the tax regime. Since 1 January 2023, copyright remunerations received by employees have, in principle, also been exempt from social security contributions.

After a legal battle before the Constitutional Court, it ultimately became clear that the intention was to exclude digital professions in the IT sector from the favourable tax regime, with a huge impact on the business world and the remuneration policy of IT companies. 79% of affected companies feared an impact on their profitability, and even 91% were concerned about retaining their staff without this regime.

A KPMG survey mapped out this impact in detail. The survey showed that, following the abolition of the copyright regime, IT professionals lose on average €3,310.55 net per year, which is still an underestimate in many cases. 21% of companies decided not to compensate for this loss, and the same percentage decided to fully compensate for it. The remaining 58% chose to partially compensate, often by reforming their reward models.

Since the 2023 reform, there has been some uncertainty regarding the concrete application of the new conditions. Several recent rulings have now provided the necessary guidance.

Even before the Constitutional Court’s decision, the Ruling Commission had stopped issuing positive rulings for the IT sector. Creative works such as designs, texts, and content (and creative profiles within the gaming industry, except for digital professions such as programmers) continued to fall under the regime. The limit of 25% of the financial envelope, multiplied by a creativity coefficient, remained in place. The Ruling Commission also clarified the requirements for exploitation and public communication of the created works.

With the recent summer agreement, the federal government is now reopening the door for the entire IT sector. The summer agreement provides for the extension of the copyright regime to the IT sector as of 1 January 2026, ending the current discrimination between digital and other professions. This means that the IT sector will once again be able to benefit from the copyright regime.

While the summer agreement still needs to be translated into legislation, the preliminary draft provides for an extension of the 2023 amended regime to the IT sector. This also means the possibility to exempt copyright remunerations from social security contributions. 

If you want your company to be ready for the reintroduction as of 1 January 2026, we recommend not waiting too long and proactively exploring the practical feasibility and necessary preparations in the coming weeks and months.

Should you have any questions about these developments or their practical implications, please do not hesitate to contact your KPMG adviser or our team of specialists in IT sector taxation.

In addition, KPMG also maintains close contacts with the tax authorities and closely monitors further developments regarding this measure.

We remain at your disposal for any questions you may have.