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Following the Arizona government's coalition agreement in January and the subsequent policy statements in March, several new tax measures were introduced.
After some delays that affected the original implementation timeline, the Program law was finally voted in parliament on July 18, 2025 and is awaiting publication in the Official Gazette.
Additionally, a draft law with various measures has been submitted to parliament and is still going through the legislative process. As this is draft legislation, provisions may still change during the legislative process.
This Alert will address individual tax changes other than those related to the expat tax regime (see seperate Tax alert) and the introduction of the capital gain tax (see separate Tax alert).
1. Changes Regarding the Annual Tax on Securities Accounts
After the Constitutional Court annulled the law of February 7, 2018, a new law was introduced on February 17, 2021, which established an annual tax on securities accounts. This tax would amount to 0,15% would be applied on the average value of the securities account(s) if this average value exceeds 1,000,000 euros during the reference period.
This law also included an anti-abuse provision stating that certain transactions, such as splitting securities accounts with the same intermediary or converting financial instruments held in a securities account into registered financial instruments, were not enforceable against the tax administration. However, in 2022, the Constitutional Court invalidated this provision but approved a general rebuttable anti-abuse provision.
In response to the above, the Program Law introduces a rebuttable presumption aimed at preventing tax avoidance (see also Tax Alert). This new anti-abuse measure applies to the conversion of financial instruments registered in a securities account to unregistered financial instruments, as well as the transfer of part of the securities to a securities account at the same or different financial institutions. This means that if the holder of a securities account cannot demonstrate that a transaction occurred for reasons other than tax avoidance, the value of the converted or transferred instruments will be included in determining the taxable threshold and, if applicable, in establishing the tax amount owed.
Examples of acceptable reasons for transactions include gifts to children or splits resulting from divorce. Unacceptable reasons may include splitting accounts to save costs or dividing investments into short-term and long-term investments.
Additionally, a notification obligation will be introduced for audits, with penalties imposed for non-compliance with this obligation. This notification initially rests with the Belgian intermediary but must be carried out by the account holder if it concerns a foreign account without a liable representative.
Effective Date: This new measure enters into force on the day of the publication of this law in the Belgian Official Gazette. However, the notification obligation must be completed for the first time no later than 31 December 2025.
2. Real Estate
One of the measures announced in the draft law containing various measures is the elimination of the ability to deduct interest paid on loans for properties other than the primary residence from real estate income, even for existing debts.
To simplify and streamline the different regimes, the federal reduction for interest, the deduction for the federal housing bonus, federal home savings, as well as the deduction related to loans for energy-efficient homes (e.g. interest on green loans and loans for low-passive-zero houses) will no longer be applicable. As a result, for the capital repayments of a mortgage loan for properties other than the primary residence and the premiums for a life insurance policy linked to that loan, individuals will only be able to rely on the long-term savings reduction.
In addition to the positive budgetary impact, the changes regarding the tax reduction and deduction on real estate will also make this system simpler and fairer.
Effective Date: Assessment year 2026 (income year 2025).
3. Carried interest
The use of carried interest is prevalent in the investment fund sector. Fund managers are expected to invest in the investment fund themselves, for which they often receive shares that are subordinated to the shares of passive investors.
Profits from these investment funds are distributed according to a "waterfall" distribution: both passive investors and fund managers share in the profits, with the fund managers' share potentially being disproportionate to their investment. This profit share of the fund managers is referred to as carried interest.
Given the ongoing discussion regarding the classification and tax treatment of this type of income (as it exhibits characteristics of various types of income), a specific taxation regime for carried interest has now been introduced by the Program law. Carried interest that is received directly by an individual (not for corporations) will be taxed as movable income at a rate of 25 percent. It is irrelevant whether this portion of the profit is distributed as interest, dividends, capital gains, buybacks, or in any other manner. The proceeds from the investment by the carried interest beneficiary will not be classified as carried interest as long as they are proportional and do not exceed what an investor, who is not a carried interest beneficiary, would earn from their investment. Additionally, stock options, taxed in accordance with the stock option law of March 26, 1999, are not covered by this regulation.
The withholding tax on carried interest income is generally owed by the debtor of this income, regardless of its legal form.
It is also explicitly stated that reclassification as professional income will no longer apply.
Definitions of "carried interest vehicle" and "carried interest beneficiary" will be included in the Income Tax Code.
Effective Date: Assessment year 2026 (income year 2025).
4. Flexi-jobs
Remuneration obtained from a flexi-job employment contract is currently exempt from income taxes, up to a maximum of €12,000 per taxable period for non-retired employees (non-indexable). The Draft law containing various measures proposes to raise this limit to €18,000 with an annual indexation.
Effective Date: Assessment year 2026 (income year 2025).
5. Alimony payments
Currently, alimony payments are 80% deductible from the total net taxable income of the payer when calculating income tax. At the same time, these payments are 80% taxable for the beneficiary.
According to the Draft law containing various measures, the deduction of alimony payments is proposed to be gradually limited. Starting January 1, 2025, only 70% of payments will be deductible from the payer's net taxable income, decreasing to 60% in 2026 and 50% in 2027. These reductions also affect how much of the payments are taxable for recipients.
Additionally alimony payments made or awarded to a person who is not a resident of a member state of the EEA will no longer be deductible. This also applies to payments made during 2025. On the other hand, these alimony payments will also no longer be taxable for these recipients.
Effective Date: Assessment year 2026 (income year 2025).
6. Income children at charge
A child is considered fiscally dependent if their income does not exceed a certain treshold. This treshold is currently set at €4,100, €5,930, or €7,520, depending on the parent's living situation.
The draft law containing various measures also raises the treshold to € 12,000 for all children (indexed amount for the assessment year 2026).
There will no longer be higher thresholds for disabled children or exceptions for single parents.
Individuals who receive a living wage or a PhD scholarship in Belgium will not be classified as dependents for income tax purposes.
Effective Date: Assessment year 2026 (income year 2025).
7. Indexation of tax reductions
According to the proposed legislation, the indexation of several tax reductions will be frozen until the assessment year 2030, based on the indexed amounts applicable for the assessment year 2025. This measure applies to:
- First bracket of income from savings deposits, dividends, interests with social purpose, loans through crowfunding platform;
- Threshold for long-term saving reduction;
- Purchase of employer’s shares, private pension savings. Any excess for private pension savingsAdditionally, for the increased amount for private pension savings, the excess or balance is carried forward to 2026 as the increased amount for private pension savings will be abolished.. It is also proposed that the exemption amount for reimbursements for commuting using alternative transportation will not be indexed for one income year only.Finally, it is proposed to permanently freeze the maximum amount of the tax credit for dependents at €550 per child.
Effective Date: Assessment year 2026 (income year 2025).
8. Simplification of the tax return
To simplify the tax return process, several tax benefits that are rarely utilized will be eliminated. Specifically, the following benefits are affected as of assessment year 2026:
- Exemption for employer contributions towards the purchase price of a computer (PC private plan)
- Additional lump sum deduction for long-distance travel.
- Tax reduction for capital losson a private Privak.
- Tax reduction for expenses related to the acquisition of an electric vehicle.
- Tax reduction for expenses related to a development fund.
- Tax reduction for wages paid to a domestic employee.
- Tax reduction for expenses incurred in the context of an adoption procedure.
- Tax reduction for premiums for legal assistance insurance.
- With respect to sole proprietorship: exemption for capital gains on business vehicles till August 31st 2025, and exemption for social liabilities.
Additionally, the percentage of the tax reduction for donations will be reduced from 45% to 30%, also effective from the assessment year 2026.
9. Tax procedures
To increase legal certainty for individual tax payers, the assessment and investigation periods will be shortened retro-actively from assessment year 2023.
- For complex and semi-complex income tax returns (only ‘complex’ income tax returns will be defined and the current ‘semi-complex’ tax returns will be considered as ‘complex’): 4 years
- In case of fraud: 7 years instead of 10 years.