Tax measures in budget framework 2026-2029

The Belgian federal government has reached an agreement on the budget framework for the period 2026-2029. As part of the agreement, several tax measures have been decided.

This framework supplements the federal government agreement of February 2025. To implement that agreement, the first set of tax measures was introduced through the Program Law in July 2025. A second set of measures (part 1 and part 2) has been detailed in a separate law, which is expected to be adopted by the Belgian Parliament in the coming weeks. In addition, several other tax measures—including the introduction of a capital gains tax and the reform of  individual income tax (Dutch and French) were prepared. However, challenging political discussions delayed a final agreement on the budget framework and put the adoption of these tax measures on hold.

The government has now reached an agreement and will move forward with the adoption of all tax measures, including both the newly agreed provisions and those previously on hold. This newsletter summarizes the latest information available on the tax measures agreed upon as part of the budget framework.

Contrary to earlier reports, there will be no increase of the standard VAT rate of 21%. Instead, the reduced VAT rate on specific supplies will be increased. The rate will increase from 6% to 12% for hotels and campings, sports and leisure activities (e.g., cinema and festivals) and take-away meals. For pesticides, the rate will rise from 12% to 21%. The VAT rate on non-alcoholic beverages served at restaurants and cafés will decrease from 21% to 12%.

The tax on securities accounts will double from 0,15% to 0,3%.

The premium tax on non-life insurance will increase from 9,25% to 9,6%. A new bank tax will be introduced.

While the Program Law already reformed the withholding tax rates applicable to dividends from “VVPRbis-shares” and liquidation reserves, the newly agreed measures provide for further increase. The preferential rate for “VVPRbis-shares” will increase from 15% to 18%.

Correspondingly, the taxation of liquidation reserves will also rise.

The exemptions from remitting wage withholding tax (which apply a.o. to shift and night work or to researchers) will be frozen in 2028 and 2029.

In respect of the reform of individual income tax, the planned increase of the tax-free amount will be postponed by one year, taking effect in 2030. Conversely, the increase of the work bonus for low-wage earners and initial reduction of the special social security contribution will be brought forward, now scheduled to begin in 2028.

The favourable tax regime for copyright income will become less attractive, as the lump-sum deduction of up to 50% will be abolished.

Excise duties on natural gas, heating oil, petrol and diesel will be increased, while the excise duty on electricity will be reduced.

A tax on packages of EUR 2 will be introduced on small parcels from outside the European Union.

The flight tax (or embarkation tax) which was already increased by the Program Law, will be raised further for long-distance flights (over 500 km), from EUR 5 to EUR 10 as from 2027. For short-distance flights, the tax will be increased to EUR 10.50 in 2028 and EUR 11 EUR from 2029 onwards.

Several details of the newly agreed tax measures have not yet been made public and are expected to be clarified in the coming days and weeks. We are closely monitoring developments and will keep you informed as more information becomes available.

If you have questions about the adopted or planned measures or would like to understand how they may impact your business, do not hesitate to contact your trusted KPMG advisor or reach out to us.