Global Mobility Tax

Belgium  | Upcoming tax and Social Security reforms

Summary

Summer is in full swing, but for the federal government parties, work has continued apace over the past few weeks. Just before the political summer recess, they reached agreement on a number of important issues, and further work was done to get previous agreements put in legal texts. So where do we stand?

The detail

Law miscellaneous provisions

On 7 July 2025, the draft law of 3 July 2025 containing various provisions was officially submitted to the House of Representatives. This draft includes a series of socio-economic and fiscal measures of the Easter Agreement such as:

• Making the Belgian expat regime more attractive
• Abolition of the federal interest deduction
• Decrease of tax deduction for alimony payments
• Limited changes for the tax deductibility for hybrid cars
• Increase of tax exemption for flexi jobs
• Changes to the thresholds of the net means of substance for dependent children
• Freezing of the indexation of certain tax benefits
• 5% capital gains tax for DBI-Beveks
• Changes with respect to the tax credit for ‘own funds’ of entrepreneurs
• Abolishment of list of tax benefits
• Changes to the assessment and investigation periods
• Changes to the disability provisions
• Making ‘light’ student jobs possible as of the age of 15
• Abolishment of obligation to hire young people
• Abolishment of current pension bonus
• Increase of the so-called Wijninckx contribution

Program Law

Around the same time, on July 17, the Chamber accepted the long-awaited Program Law in its entirety. For a high-level and non-exhaustive overview of the measures related to remuneration and personal income tax included in the Program Law we refer to our microsite, to which also the relevant employment related measures will be added.

Summer agreement

Even more recently, the federal government has taken a new step in the further implementation of the coalition agreement. After a final night of negotiations, a political agreement was reached on Monday morning, 21 July 2025. Starting in 2026, the Belgian federal government will implement a series of employment and tax reforms aimed at making work more financially rewarding. Employees, pensioners, and families with children will all feel the impact—some positively, others less so. Although the summer agreement still needs to be translated into concrete legislation, it already provides a clear picture of the direction the government wants to take. To give you a flavour:

• More net income: From 2025 to 2029, the tax-free lump-sum allowance will gradually rise from €10,910 to €15,300, increasing net pay—especially for low and middle-income workers.
• Equal increase of the tax-free amount for dependent children: The child-related tax-free allowance will shift toward a fixed amount per child, starting with a 33% increase for the first child and eventual alignment for the first and second child by 2029.
• Reform of the special Social Security contribution: The special Social Security contribution will be reduced, with single taxpayers benefiting most—up to €365 more net income per year.
• Dual-Income households benefit, single-income households lose out: The marital quotient will be phased out by 2029 for non-retired couples, reducing tax advantages for single-income households.
• End of tax reduction for unemployment benefits: The tax reduction on unemployment benefits will be phased out, potentially costing affected individuals up to €223 per month.
• Increase of job bonus: Low-wage earners will benefit from a higher job bonus.
• Working after retirement becomes more attractive: From 2026, retirees who continue working will be taxed at a reduced flat rate of 33% instead of progressive tax rates.
• New “Vinted Exemption” for secondhand sales: Private individuals can sell secondhand items tax-free up to €2,000 per year via platforms like Vinted, Marketplace, or 2dehands.be.
• Night work: The general ban on night work is to be abolished, with a more narrow definition for night work in distribution and e-commerce (midnight to 5 a.m.), more flexibility regarding procedures and premium requirements.
• Voluntary overtime hours: The current tax friendly overtime credit would be extended permanently and the ‘relance’ voluntary overtime scheme would be extended beyond 2025 (with an increase to 240 hours per calendar year).
• Hourly schedules in labour regulations: Reforms are being considered to simplify the requirement to include all work schedules in labor regulations by introducing a “working time framework” under strict conditions.
• Minimum weekly working hours (part time employees): The rule requiring part-time employees to work at least one-third of full-time hours is set to be abolished, pending discussions on banning on-call contracts.
• Capping of the notice period: A maximum notice period of 52 weeks would apply after 17 years of seniority for contracts signed from January 1, 2026, without affecting current employees.
• Annualization: A draft law on annualizing working time—allowing flexible work periods while maintaining the yearly average—is being submitted for consultation with the National Labour Council.
• Pensions: Pension reform introduces a bonus-malus system, rewarding delayed retirement and penalizing early retirement.

Although not strictly part of the summer agreement, we draw your attention to the approval by the Council of Ministers of a Royal Decree regarding the increase of the maximum employer contribution of the meal voucher from 8 to 10 euros, as from January 2026.

Stay tuned on our microsite!

Contact us

For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:

Philip Maertens 
Partner

Bart Elias 
Partner

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