Law containing miscellaneous provisions approved by Parliament

On 12 December 2025, Parliament approved a law which contains a second series of tax measures included in the government agreement (also referred to as second program law). Our earlier newsletters about the draft law which was submitted to Parliament are available here and here. Meanwhile several amendments have been adopted. The law is expected to be published in the Belgian Official Gazette before the end of the year.

The law contains the following tax measures:

The dividends-received deduction will also be applicable to the received group contribution. This adjustment was necessary in light of recent case law of the European Court of Justice. Recently, the Court of Justice of the EU has ruled in the case of John Cockerill that the current prohibition violates the Parent-Subsidiary Directive. This change will apply as from the 10th day following the publication in the Belgian Official Gazette.

In respect of DBI-beveks/RDT-sicavs, a separate tax of 5% will be due on the exempt part of capital gains realized on the sale of shares in such investment companies (excluding the private privak). The credit of withholding tax on dividends will also only be allowed if a minimum salary of currently 45.000 EUR (or if the taxable income of the company is lower, a minimum salary at least equal to that taxable income) is paid to the business leader (cfr. condition for reduced corporate tax rate of 20% on first EUR 100.000 of income). The changes will apply as from assessment year 2026. Any change to the closing date of the financial year as from 3 February 2025 which is not justified by other motives than avoidance remains without effect.

As a reminder, the program law made the participation condition for the dividends-received deduction stricter for participations of less than 10% (cfr. our earlier newsletter).

Existing limitations on the use of the carry-forward and on the carry-forward in time will be abolished. The prohibition to combine the investment deduction with regional aid will also be abolished. These changes will enter into force with retroactive effect as from 1 January 2025. The increased thematic deduction of 40% for investments in energy efficiency, renewable energy, carbon emission-free transport, environment-friendly investments and supporting digital investments will also be available for large companies (previously 30%) as from assessment year 2027.

The regime introduced by the law of 25/11/2021 on fiscal and social greening of mobility provides that car costs in relation to plug-in hybrids purchased, leased or rented as from January 1, 2026 are no longer tax deductible.

However, the law containing miscellaneous provisions postpones this non-deductible in the personal income tax (in the corporate income tax nothing changes).

Specifically, the law provides that for self-employed persons and individuals declaring their actual professional expenses (opposed to flat-rate deduction), car costs for plug-in hybrids purchased, leased or rented in the period 2026-2029 will remain deductible as professional expenses to a certain degree.

The deductibility in the personal income tax will be as follows:

* “Adjusted CO2-formula”: the fuel coefficient is no longer included in the formula

At the same time, to avoid that plug-in hybrids purchased, leased or rented between 1/7/23 and 31/12/25 would be treated – in the personal income tax - worse than plug-in hybrids acquired as from 2026 (because of the extended deductibility), the other car costs of the former hybrids will, contrary to what was foreseen in the current regime (cfr. the law of 25/11/2025), be deductible according to the old CO2-based formula (including fuel coefficient) with a maximum of 75% or if the CO2 emission < 50 g/km with a maximum of 100%, as from January 1, 2026.

Furthermore, the current minimum deduction of 75% in the personal income tax for cars purchased before 1 January 2018, will decrease by 5% annually starting in assessment year (AY) 2027, reaching 50% as from AY 2031.

Next to that, the definition of a fake plug-in hybrid is updated. Specifically, already effective as from January 1, 2025, the fake plug-in hybrid regime will only apply to vehicles with (i) a battery with a capacity of less than 0,5 kWh per 100kg car weight or (ii) a CO2 emission of more than 75 g/km (previously 50 g/km) if the emission is calculated according to the Euro 6e-bis norm or a later norm.

The expat regime will be made more attractive. The part of the expenses proper to the employer will be limited to 35% instead of 30% and its absolute ceiling of EUR 90.000 will be abolished. The qualifying minimum salary will also be decreased from EUR 75.000 to EUR 70.000. These changes apply to salaries paid or attributed as from 1 January 2025.

In order to enable taxpayers to benefit from the retroactive entry into force of the less strict conditions of the regime, a request can be filed within 3 months as from the 10th day after publication of the law in the Belgian Official Gazette.

The withholding at source of the solidarity contribution on supplementary pensions paid in the form of capital will be uniformly set at 2% as from 1 January 2026. An additional solidarity contribution of 2% is due on the part of such pensions above 150.000 EUR paid during life as from 1 July 2027.

The Wijninckx contribution is increased from 3% to 12,5% as from 2026.

The maximum employer intervention is increased with 2 EUR from 6,91 to 8,91 EUR. Only in case the employer intervention equals or exceeds this maximum, will the deductibility with the employer double from 2 to 4 EUR.

Several tax benefits will be abolished:

• Exemption PC-privé: no longer applicable to interventions by the employer as from 1 October 2025;
• Exemption capital gains business vehicles: no longer applicable to capital gains realized as from 1 September 2025;
• Exemption for social liabilities: no new exemption for salaries attributed as from 1 October 2025;
• Exemption for additional personnel exports/quality care: no longer exemption for hires as from 1 September 2025;
• The exemption for traineeships and for additional personnel with low wage, the increased lump-sum deduction for long distances and the tax reductions for capital losses private privak, acquisition electric vehicle, charging station, expenses development fund, domestic servant, adoption and legal assistance will be abolished as from AY 2026.

The tax reduction for donations decreases from 45% to 30% as from AY 2026.

• Mortgages: a.o. abolition of deduction of interest on debt for other than own dwelling – as from AY 2026, also for current debt;
• Flexijobs: increase of the exemption from EUR 12.000 to EUR 18.000 (and to be indexed) – as from income year 2025;
• Alimony payments: gradual reduction of the deduction and corresponding taxation from 80% to 50%, starting as from 2025 - no deduction and corresponding taxation if paid outside EEA and Switzerland, also as from 2025;
• Allowable means of existence for tax dependent persons: general increase for children to 12.000 EUR (indexed amount for AY 2026); individuals (including children) enjoying professional income which is a business expenses for the taxpayer cannot be considered as tax dependent persons (extension of salary to professional income); individuals receiving a living wage can no longer be considered as tax dependent persons; only scholarships which lead to the constitution of social security entitlements are not allowable means of existence (previously all scholarships were not allowable). Entry into force: as from AY 2026;
• Indexation: freezing of indexation of tax expenses at level of AY 2025 up until AY 2030 (with some deviations, e.g. for pension savings);
• Tax credits: Doubling of tax credit for own means (self-employed), as from AY 2026.

While the 4-year statute of limitation period in the case of non- or late filing of the tax return is maintained, the periods of 6 and 10 years for semi-complex and complex tax returns will be reduced to 4 years, eliminating the need for a distinction between semi-complex and complex tax returns. The period for fraud will be reduced from 10 to 7 years for both income tax and VAT. The period for keeping books and documents is also reduced to 7 years.

The previous legal text on notification of indication of fraud will be reinstated. Art. 354 BITC in respect of the extended assessment period for complex tax returns is updated in line with the new CFC regime which taxes non-distributed passive income from low-taxed entities instead of non-distributed profits from artificial constructions under the previous approach. Art. 354/1 BITC (taxation of certain disallowed expenses in case of complex tax return) is also updated.

The changes will apply retroactively as from assessment year 2023 (1 January 2023 for VAT).

The Code of Miscellaneous Duties and Taxes is changed in order to give the tax authorities access to the Central Contact Point of the National Bank for the purposes of auditing the tax on securities accounts. Indications of tax fraud are not required. Entry into force: 1 December 2026.

A legal framework is provided for the use of data held by the Central Contact Point for the purposes of datamining (selection of files). Entry into force: 10 days after publication of the law.

Securities accounts and crypto assets accounts must be reported to the Central Contact Point. Suppliers of crypto asset services are subject to the law regarding the Central Contact Point. Entry into force: 1 December 2026. The first communication of the balances of the securities and crypto accounts will relate to the balances on 31 December 2025 and 30 June 2026.

If you have any questions on the above measures and their implications to your tax position, do not hesitate to reach out to your trusted KPMG tax advisor. We can provide you with more insights on these rules and expected future developments.