Fiscal year-end topics and tips

As the year draws to a close, it is crucial to reflect on key matters that require your attention before transitioning into the new year. This newsletter highlights several important issues that warrant consideration and timely action to ensure you are well-prepared for the challenges and opportunities ahead.

To avoid a corporate income tax surcharge, companies can make prepayments throughout the taxable period. Prepayments can be made in four instalments, each generating a credit that reduces the corporate income tax surcharge. The credit depends on the quarter in which the prepayment is made (payments made in the first quarter generate the highest credit). For taxpayers with a financial year ending on 31 December 2025, the prepayments for the fourth quarter must be received by the Advance Payment Department no later than 22 December 2025. This applies, of course, only if corporate income tax is expected to be due in assessment year 2026.

The proposed amendments to the Belgian Law on minimum taxation are scheduled to be adopted by the Belgian Parliament this week, as described in our previous news item about the Changes to the Belgian Law on Minimum Taxation. As a reminder, it must be noted that the deadline for filing the first DMTT-return is extended until 30 June 2026. For details, see our news item about Extended Belgian DMTT-return filing deadline.

The federal government has agreed to increase the taxation of dividends from VVPRbis shares from 15% to 18% as from next year. (Management) companies should therefore consider to distribute an intermediary dividend before year-end. However, the introduction of the capital gains tax, also as from next year, should be taken into account. Companies must be valued per 31 December 2025, as capital gains built up until that date fall outside the scope of the capital gains tax. A distribution of an intermediary dividend before that date reduces the equity of the company and could therefore result in a higher taxable capital gain at the moment of the later transfer of shares in the company compared to the situation where no dividend was distributed.

For many groups of companies, the reporting period coincides with the calendar year, making 31 December the deadline for submitting the Master File Form, Country-by-Country notification (‘CbC NOT’), and Country-by-Country report (‘CbCR’) for transfer pricing. To determine whether a Belgian group entity must submit a Master File Form, the same thresholds must be considered as for the Local File Form, which, if applicable, was submitted together with the corporate income tax return (earlier this year). The Master File Form must be submitted within 12 months after the last day of the reporting period.

The CbCR must be prepared and submitted for multinational groups that, for the reporting period immediately preceding the most recently closed reporting period, achieve total consolidated gross group revenues of 750 million euros or more, as reflected in the group’s consolidated financial statements. The CbCR must also be submitted within 12 months after the last day of the group’s reporting period. This obligation generally rests with the ‘ultimate parent entity’.

To notify the submission of the CbCR, an obligation was introduced requiring every Belgian entity within a multinational group that must file a CbCR to also submit a CbC NOT. The CbC NOT must be filed no later than the last day of the multinational group’s reporting period (in principle, a one-time obligation unless certain changes occur). Earlier this month, the new XSD schema for the CbC NOT was made available on the website of the FPS Finance.

Finally, we also refer to the new and more extensive transfer pricing documentation requirements starting in 2025 (with the forms/documentation to be submitted from 2026 onward). In this context, we would like to remind you of the following flash: Updated Belgian transfer pricing forms.

In the context of their professional activities, natural persons may (in addition to regular professional income) receive a remuneration for the transfer of copyrights. The compensation for the transfer of copyrights is taxed more favorably than regular professional income, namely at 15% withholding tax instead of the progressive personal income tax rates. This regime was particularly popular in the IT sector (as computer programs also fell under qualifying copyright-protected works) until the previous government excluded this sector from the regime.

As of 1 January 2026, the copyright regime (after a two-year absence) will return to the IT sector. Not entirely unchanged, as, among other things, the associated favorable lump-sum expense deduction will no longer apply. Nevertheless, this regime once again seems to be a 'must-have' for employers in the sector, given the competitive disadvantage in its absence.

Both employers and taxpayers who intend to apply this favorable regime again from 2026 onwards are advised to start the necessary preparations early, such as performing the necessary calculations and updating contractual provisions. Don’t forget the administrative obligations, such as the tax forms 281.45, which must be filed no later than 28 February.

With the end of the year approaching, we would also like to remind you of the periodic review of the formalities for the tax incentive relating to the (partial) exemption from wage withholding tax for research and development (‘Wage withholding tax exemption for R&D’). In particular, it is important to evaluate and, if necessary, update the information uploaded to the Belspo portal, including employee data, R&D percentages, and descriptions of R&D projects and/or programmes. Especially if certain projects and/or programmes have an end date at the end of this year and require extension, it is crucial to take action before year-end.

For new R&D projects and/or programmes starting in 2026 that could be eligible for the wage withholding tax exemption for R&D, timely registration (prior to the start of the project or program) is crucial. Given the formalistic approach and the strict practices enforced by the tax authorities, we would like to emphasise once again the importance of accurate administrative follow-up.

In addition, we understand that legislation is being developed regarding recognition as a ‘research center’ (as part of the promised ‘simplifications’ in the coalition agreement). Such recognition could reduce the administrative and formalistic burdens for companies where R&D plays a significant role. We will continue to monitor these developments closely. 

Please do not hesitate to reach out to your KPMG advisor should you have any questions or wish to discuss these topics in more detail.