On 29 July 2026 the bill of 15 July 2026 containing a significant reform of the personal income tax system in Belgium was officially published in the Official Gazette. You can find herewith a high-level and non-exhaustive overview of the new tax measures.
More net income for those who work
Workers will see an increase in their net pay thanks to the planned gradual (i.e. spread over 5 assessment years: 2027-2031) increase of the lump-sum tax free allowance, notably the portion of income which is not subject to tax. The exempt allowance will rise from EUR 10.910 in 2025 to EUR 15.600 by income year 2030 (assessment year 2031). A first step has already been implemented in 2026 by increasing the lump-sum tax free allowance to EUR 11.550. The change will benefit all workers, though low and middle-income earners will gain the most in relative terms. The effective impact of this change will strongly depend on the level of the family income, the nature of the income and the composition of the family. The increase of the lump sum tax-free allowance will be neutralized for pension and replacement income.
Equal increase of lump-sum tax-free amount for dependent children
Taxpayers who have dependent children can receive an additional tax-free allowance on top of the standard tax-free portion of income. This allowance typically increases with the number of children.
In the context of equal treatment, the federal government plans to move towards a fixed amount per child. As a first step, the allowance for 1 and 2 children will gradually (in 4 steps) increase to EUR 2.650 per child by 2029 (assessment year 2030). The allowances for three or more children will no longer be indexed. For assessment year 2026 the amounts are: EUR 2.030 for one dependent child, EUR 5.130 for two dependent children; EUR 11.440 for three dependent children; EUR 18.510 for four children at charge and a fixed increase of EUR 7.070 for every additional child at charge.
Furthermore, the additional tax-free allowance for “single parents” will – starting as of income year 2029 – be limited to actual single parents. Taxpayers who are de facto living together or who are legally cohabiting or married – but are considered single for tax purposes – will no longer be eligible for this tax-free amount for single parents.
Reform of the special social security contribution
As of the income year 2028, the special social security contribution, a contribution which was introduced back in 1994 as an additional funding of the Belgian social security, will be reformed and reduced in favour of single taxpayers, who could gain up to EUR 365 more in net income per year.
Reduction/phase-out of the marital quotient: single-income households will lose out
Households where only one partner works will lose out under this reform. The marital quotient – a tax advantage for married or legally cohabiting couples where one partner has little or no income – will be phased out. This is for sure a game changer.
Currently, up to 30% of the higher-earning spouse’s income can be attributed to the lower-earning (or non-earning) spouse, reducing their overall tax burden by taking advantage of the progressive tax brackets.
Spread over four assessment years (2027-2029), this advantage will be reduced by half for non-retired couples. As a first step the maximum amount has been reduced to EUR 11.780 for assessment year 2027 (instead of EUR 13.460 which was the amount initially applicable for assessment year 2026).
For retired couples, a phase-out will occur very gradually (by reducing the maximum amount) over almost 20 years, with a full stop as of assessment year 2046. This change will have a significant impact for couples where one partner earns little or no income.
Addressing improper use of management companies
To curb tax optimization through management companies, the minimum managerial remuneration (towards the company director) required to qualify for the reduced corporate income tax rate of 20% (on the first EUR 100.000 taxable profit) is increased from EUR 45.000 up to EUR 50.000 and subject to further indexation. A first indexation up to EUR 51.000 already took place as of assessment year 2027.
A company director’s income typically consists of the periodical gross director income, but can also include various benefits in kind (company car, smartphone, laptop, etc.) and it can even be complemented with tantièmes. As of assessment year 2027, to benefit from the reduced corporate income tax rate, only up to maximum 20% of the annual gross director income may consist of lump-sum valued benefits in kind. This may cause certain company directors who have a management company to revisit their “remuneration package”. Of course, additional bonuses on top of the gross director income will still be possible.
20% cap lump-sum benefits in kind: also applicable for employees!
The 20% cap for lump-sum valued benefits in kinds is not limited to self-employed company directors. It also applies for employees. There, the lump-sum benefits in kind for all employees (on a collective level) may not exceed 20% of the total taxable salaries of the employees. If the 20% cap is exceeded, a separate tax of 7,5% will be applied (in the hands of the employer) on the surplus (i.e. the excessive part of lump-sum benefits in kind) as of assessment year 2027.
Overtime
Currently, a favourable tax regime applies to a limited number of overtime hours which give rise to a statutory overtime supplement. It concerns a tax reduction in the hands of the employees and a partial exemption for transferring wage withholding taxes for the employers. The number of hours was temporarily increased of 130 to 180 hours (until the end of 2025) and this increase becomes permanent from 1 January 2026. Special higher limits remain applicable for road and rail workers (280 hours) and hotel and catering industry employees (360 hours).
Voluntary overtime
The current scheme of voluntary overtime and relance hours will be simplified and unified. Starting from 1 April 2026, the total number of voluntary overtime hours that can be performed on an annual basis is increased up to 360 hours distributed between 240 hours (instead of 120) without overtime pay, and which are free of personal income tax and social security contributions, and 120 hours subject to statutory overtime supplement and, within the above mentioned limits, subject to the favourable tax regime. Such voluntary overtime will require a prior written agreement, valid for a fixed term of one year, and tacitly renewed each time for a new year. Either party can terminate that agreement subject to a notice period. While this bill handles the tax side of it, the social security and labour law aspects will be part of separate legislation.
Copyrights regime
The beneficial tax regime for copyrights can once again be applied to computer programs as of January 1 2026. The reason for this relaxation is that under a reform by the previous government, the IT-sector (i.e. software development) was explicitly excluded from this regime. The draft law retains the legal text of the previous reform and adds “computer programs” to it. However, there is no return to the old, broad scope of application as such.
This change is particularly important for software and technology professionals, IT consultancies, and digital businesses. The general conditions for the regime continue to apply: the work must still be protected by copyright, and the rights must be transferred or licensed. Recently, the Minister of Finance, Jan Jambon, confirmed that software for internal use may also fall under the reproduction right.
Copyrights are fiscally attractive because they are considered movable income (for personal income tax purposes) up to a certain ceiling (i.e. EUR 77.220 for income year 2026). The tax rate is limited to 15%. With the publication of the Program Law on June 1, 2026, the lump-sum expense deductions of 25% – 50% only apply to copyright income relating to activities for which the taxpayer holds an “artwork certificate” (“kunstwerkattest” / “attestation du travail des arts”) and this as of assessment year 2027.
New deduction for self-employed individuals
A new deduction (ondernemersaftrek/déduction pour entrepreneurs) for certain self-employed individuals will be introduced as of assessment year 2028. This will allow a self-employed person (in main or secondary occupation) to deduct a first bracket of 10% of their profits or benefits (after offsetting tax losses and deducting professional expenses), with a maximum amount of EUR 620 as indexed for assessment year 2026 (to be further increased as of assessment year 2030).
Abolishment of tax increases in case of insufficient advance payments
Traditionally, for many years companies, company directors, one-man businesses and cooperating spouses better made sufficient quarterly advance tax payments towards the Belgian tax authorities, in order to avoid standard tax increases. This system of tax penalties has been abolished for self-employed individuals with profits or benefits as of assessment year 2027. Moreover, a so-called “fifth period” has been introduced for advance payments. Those taxpayers who pay by 20 February (of the tax year, i.e. the year following the income year), will be entitled to a tax bonification (instead of a tax increase).
New “Vinted exemption” for secondhand sales
Selling used items via platforms like Vinted, Marketplace, or 2dehands.be is tax-exempt up to EUR 2.000 per year as of assessment year 2027. Even frequent sellers of secondhand goods will not be taxed as long as they stay under this annual limit.
Working after retirement becomes more attractive
Typically, retirees who (after having reached a full career of 45 years or who have reached the legal pension age) continue working after their retirement are taxed at the regular progressive tax rates (up to 50% + communal tax), which is not very tax friendly. As of January 1, 2027 a reduced flat tax rate of 33% applies to these earnings if it is considered as employment income (not self-employed income).
Increase of fiscal job bonus
Workers with low wages will see a substantial increase in the fiscal job bonus, as an extra support to strengthen their purchase power. The fiscal job bonus is calculated as a percentage of the social work bonus (the latter results in a reduction of the social security contributions of the worker). The fiscal job bonus will be increased (from 33,14%) to 35% of the social job bonus from assessment year 2029, with the aim of making employment more attractive. For the lowest wages the job bonus will gradually be increased (from 52,54%) to 63% for assessment year 2027 and 2028) and to 72% of the social job bonus by assessment year 2029.
Calculation of the tax on the tax-free amount
As of assessment year 2030, the tax on the tax-free allowance will again be calculated using the same progressive tax rates as those used for the calculation of the personal income tax.
Furthermore, as of assessment year 2027, taxpayers who have income from a study grant under which they build up social rights but which are not subject to income tax (i.e. doctoral grant holders) will be excluded from the application of the tax credit for dependent children.
Adjustment to the calculation base for supplementary communal taxes
The calculation base for the supplementary communal taxes will be adjusted. To protect municipalities from significant revenue losses, the government will apply a corrective factor on the total tax, designed to neutralize the estimated impact of the tax reform on municipal personal income tax revenues from assessment year 2029. The corrective factor will not be applicable in the non-resident income tax.
Alignment for lump-sum alimony payments taxed via a conversion rate
Alimony payments that are paid by way of a lump-sum (instead of periodical alimony payments) are annually taxed (in the hands of the beneficiary) as a conversion interest (omzettingsrente/rente de conversion). Previously, 80% of this annual interest was added to the jointly taxed income, reflecting the 80% taxability limit on alimony. The law of 18 December 2025 regarding miscellaneous provisions gradually reduced the deductibility of alimony payments from 80% to 50%, and correspondingly reduced taxability from 80% to 50%. However, this reduction was not yet applied to lump-sum alimony taxed as conversion interest. The law now of 15 July 2026 corrects this oversight.
Tax reduction for unemployment benefits and pension income
The tax reduction on unemployment benefits will be (lowered during assessment years 2027-2029 and ultimately) phased out (as of assessment year 2030). Moreover, the tax reduction for pension income will be reduced as of assessment year 2027 for taxpayers with a high taxable income.
Other measures
For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:
Philip Maertens
Partner
Nic Boydens
Partner
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