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The new federal coalition agreement was finalised at the end of January by the Arizona negotiators after an eight-month negotiation period. The focus of the agreement is on strengthening employees’ purchasing power and businesses’ competitiveness. Further efforts will be made to support innovation, research, and development, with particular attention to the energy transition and climate change. To achieve these objectives, the tax system should become simpler and more transparent, while reducing the administrative burden on entrepreneurs. Below is a thematic overview of the proposed tax measures.
Personal Income Tax (PIT)
Movable Taxation and Investments
- Solidarity contribution (‘capital gains tax’) on realised gains from financial assets, including crypto-assets:
- 10% tax rate;
- Exemption for € 10,000 in gains (indexed annually);
- For ‘substantial interest’ (participation of at least 20%):
- Tax-free threshold up to € 1 million in gains;
- 1.25% tax between € 1 million and € 2.5 million;
- 2.5% tax between € 2.5 million and € 5 million;
- 5% tax between € 5 million and € 10 million;
- 10% tax from € 10 million upwards.
- Losses deductible within the same year, but non-transferable;
- Historical gains (accrued before enactment) remain tax-exempt.
- Copyright royalties (preferential tax regime)
- Digital professions (e.g., software developers) will once again be eligible.
- Liquidation reserve
- Newly created liquidation reserves (likely ‘at the earliest from tax year 2027’): the preferential withholding tax rate upon distribution after the waiting period will be increased from 5% to 6.5% (effective tax burden rises from 13.64% to 15%).
- Waiting period reduced from five to three years.
- Specific ‘carried-interest’ regime (private equity fund managers):
- Tax rate (?) capped at 30%;
- No impact on existing arrangements.
- Various occasional earnings will be tax-exempt up to a certain threshold (€ 2,000) (‘de minimis rule’);
- Integration of conditions for tax shelters for start-ups and growth companies;
- Incentives for start-ups will be harmonised and strengthened;
- Regulatory framework for Private Privak will be relaxed;
- Reduction of restrictions for certain investors (pension funds, insurers, etc.).
Real Estate Taxation
- Abolition of federal interest deduction for non-owner-occupied properties;
Family Taxation and Personal Allowances
- Modernisation of the additional tax-free allowance for dependent children: same allowance for each child up to a capped amount;
- Additional allowance for single parents granted only to genuinely single parents;
- Child tax credit will no longer be indexed;
- Assessment of increasing tax relief for childcare for working parents;
- Social benefits (minimum subsistence income) will be considered as income for tax calculations (remains tax-free due to an increased tax-free allowance);
- Marital quotient:
- Halved for non-retirees (by 2029);
- Phased-out scenario with a long transition period for retirees.
- Maintenance payments: tax deductibility will gradually decrease from 80% to 50%; payments to non-EEA countries will no longer be deductible.
Reduction of Tax Reliefs and Credits
- Various tax reliefs and deductions in personal income tax will be abolished, including: tax reliefs for domestic staff; adoption costs; legal aid, electric motorcycles, tricycles and quadricycles; capital losses from the full distribution of Private Privak assets; additional deductions for export-related employment and integral quality management, as well as the increased deduction for local government mandates and internship bonuses and the increased flat-rate deduction for long-distance commutes.;
- To incentivise employment, tax relief for unemployment benefits will be abolished, and relief for higher pensions will be scaled back.
- Deduction for charitable donations reduced from 45% to 30%.
- New tax thresholds and non-indexation of certain tax expenditures.
Employment Taxation
- Reduction of labour taxation from 2027:
- Increase in the tax-free allowance (focusing on lower incomes);
- Reduction of the Special Social Security Contribution (SSSC);
- Gradually strengthening of the (fiscal) work bonus.
- Pensioners who continue to work (after a full 45-year career or after reaching statutory retirement age) will face a maximum tax rate of 33%.
- Collective bonus schemes (e.g., CAO 90, profit-sharing bonuses) will be harmonised.
- Meal vouchers:
- Increase in value (twice by €2) + abolition of other vouchers (eco, culture, and consumption vouchers, etc.);
- Corresponding increase in employer deductibility.
- Framework for employer-reimbursed expenses;
- Salary sacrifice / flexible remuneration limited to max. 20% of annual gross salary.
- Plans ‘PC privé’ to be abolished.
- Student employment:
- Legal limit increased permanently from 475 to 650 hours per year;
- Tax exemption for dependent children doubled (€ 12,000 cap on net means-tested income for all).
Self Employed Individuals
- ‘Entrepreneurial Deduction’ for self-employed individuals in a principal or secondary occupation: deduction of an initial tranche of business profits or earnings (after offsetting tax losses and deducting professional expenses);
- Tax deduction for donations of goods (excluding alcohol, tobacco, etc.) to recognised charitable organisations;
- Reform of the status of part-time self-employed individuals and the possibility of ‘VAPZ’ (Voluntary Supplementary Pension for the Self-Employed) contributions;
- Addressing abuses related to false self-employment and structurally loss-making secondary occupations;
- Abolition (for profit and earnings recipients in Personal Income Tax) of the tax increase for insufficient advance payments and strengthening of the bonus system;
- Doubling of the existing incentive for own capital;
- VAPZ: maximum contribution percentage increases from 8.17% to 8.5% (classic VAPZ) and a corresponding adjustment for social VAPZ;
- Harmonisation of various second-pillar pension schemes for the self-employed (VAPZ, IPT, POZ) and reform of the 80% rule;
- Abolition of the premium tax for the ‘pension agreement for the self-employed’ (POZ);
- Student self-employed individuals: making the temporary increase in tax thresholds permanent;
- Self-employed women after childbirth: extension of the exemption from social security contributions from 1 to 2 quarters and removal of the obstacle to tax deductibility of VAPZ contributions;
Innovation / R&D (Research and Development)
- Improvement of the expat regime;
- Tax-free allowance increased from 30% to 35%, with the abolition of the € 90,000 cap;
- Minimum gross salary requirement lowered from € 75,000 to € 70,000.
- Investment deduction becomes indefinitely transferable (without restrictions);
- Investment deduction for R&D (‘technology deduction’): regional certification requirement for R&D investments is abolished;
- Thematic investment deduction: 40% rate also applies to large companies;
- Possibility of accelerated depreciation for investments in R&D, defence, and energy transition;
- Possibility of declining balance depreciation for SMEs;
- Opportunity for companies to be recognised as a ‘research centre’ and strengthening of benefits for ‘research centres’.
Mobility Taxation
- Review of access conditions for tax deductibility of carpooling;
- Reform of the existing mobility budget, with necessary transitional measures;
- Temporary increased deduction for electric vans and trucks;
- Extended transition period for hybrid company cars:
- Maximum deduction rate for hybrids remains 75% until the end of 2027, or a higher percentage for hybrid cars emitting a maximum of 50 g/km;
- Deduction percentages apply for the entire usage period by the same owner/lessee;
- Fuel costs for hybrid vehicles remain 50% deductible until the end of 2027;
- Electricity consumption costs of hybrids: same deductibility as fully electric models.
Corporate Income Tax (CIT)
DBI-Deduction
- Reform from a tax deduction to an exemption (increase in initial reserve state);
- Participation requirement:
- Minimum acquisition value increased to € 4 million (instead of € 2.5 million), and the participation must constitute a ‘financial fixed asset’ (sustainable bond) OR;
- Minimum 10% participation (unchanged);
- The tightening would not apply to SMEs or investments in start-up companies: original DBI regime retained.
- DBI investment fund system remains, but 5% tax on capital gains upon exit, with withholding tax only creditable against CIT if the minimum director’s remuneration condition is met (new requirement).
Minimum remuneration for company directors increases from € 45,000 to € 50,000 (now indexed).
Benefits in kind for company directors: maximum 20% of annual gross salary.
Non-deductible expenses: a simpler alternative system is under review.
Car costs: see above under ‘Mobility Taxation’.
Investment deduction and depreciation: see above under ‘Innovation / R&D’.
Abolition of minor tax deductions, exemptions, and reliefs, e.g.:
- Exemption of social liabilities;
- Exemption of capital gains on company vehicles.
Making the group contribution scheme more flexible:
- Allowing both direct and indirect participations;
- New companies no longer excluded;
- DBI exemption for profits arising from a group contribution.
Deduction Prohibition Following Tax Audits
- Deduction prohibition due to tax audits will only apply in cases of repeated serious infringements (no longer for good-faith errors or administrative oversights).
Other Corporate Tax Reforms
- Improvement and simplification of the tonnage tax system.
- Increase in prepayment penalties will no longer be affected by signing a framework agreement under a tax shelter scheme.
Exit tax for emigrating legal entities: legal anchoring.
VAT
- 21% VAT on fossil fuel boilers (gas, oil, etc.), regardless of the age of the property.
- VAT rate on coal increased from 12% to 21%.
- Temporary VAT reduction from 21% to 6% for the supply and installation of heat pumps.
- Expansion of the scope of the reduced VAT rate (6%) for demolition and reconstruction to include sales, with a stricter surface criterion: 175 m² (previously 200 m²).
- Expansion of the white cash register system to other fraud-sensitive sectors.
- Introduction of ‘near real-time reporting’ for B2B transactions from 2028.
Miscellaneous Duties and Taxes
- Annual Tax on Securities Accounts (JTER): addressing possible avoidance strategies.
- Stock exchange tax modernised and simplified.
- Digital tax for large tech companies being prepared at the European level.
- Flight tax: a uniform rate (€ 5) for both intra- and extra-EU flights, but retaining the existing rate (€10) for short-distance flights.
- Exploration of an international framework for the introduction of a kerosene tax.
- Lower packaging tax on products that are significantly more expensive than in neighbouring countries.
Excise Duties
- Higher excise duties on tobacco and ‘vapers’.
- Abolition of excise duties on zero-sugar drinks, coffee, and tea.
- Codification of excise legislation into an Excise Duty Code.
Administrative Simplification and Reduction of Burdens
- Corporate contribution based on balance sheet total.
- Abolition of the tax on bank documents;
- Abolition of minor federal registration duties.
- Abolition of appendix No. 270 MLH (rental annex) and introduction of a less burdensome alternative (taking into account existing tax information).
- No more nil VAT client listings following the introduction of ‘e-reporting’.
- Abolition, revision, or simplification of daily revenue books and various VAT registers.
- Abolition of costs related to business registration or changes in the KBO (Crossroads Bank for Enterprises).
- Abolition of filing costs for financial statements for small companies and associations.
- Simplification of Transfer Pricing documentation.
- ICT platform for online publications in the Belgian Official Gazette.
- Possibility of digital labelling.
Tax Procedure
- Restoration of direct and immediate access to the tax auditor or the competent control service;
- The tax mediation service will be transformed into a tax arbitration body;
- In the tax on legal entities , the taxable period may deviate from the calendar year;
- Tax penalties will no longer apply to a first-time good-faith error (only a warning will be issued);
- The system of penalties for deliberate obstruction of a tax audit will be replaced by the application of a minimum taxable profit;
- Harmonisation of tax deadlines;
- New permanent (para)fiscal regularisation with increased rates of 30% for non-time-barred capital and 45% for time-barred capital.
Combating Tax Fraud
- Increased resources for tax audits;
- Close cooperation and consultation with the regional governments.
The agreement indicates that all measures will be implemented by 2026, with some—such as the reduction of labour costs—taking effect at a later date or being gradually phased in.
Although the agreement still needs to be translated into legislative texts and go through the parliamentary process, it already provides an initial overview of the policy direction and fiscal ambitions of the new Arizona coalition government.
RSM will be organising seminars in the coming weeks to provide more information on the practical implications.
If you would like to receive additional information on this matter or require tax assistance, the RSM Belgium Tax team is at your disposal ([email protected]).
