Circular letter clarifying retroactive changes to the Belgian expat regimes published

The Law of 18 December 2025 introduced several significant changes to the Belgian special tax regime for inbound taxpayers and researchers, which are applicable with retro-active effect as from 1 January 2025. These changes aim to enhance Belgium’s attractiveness for internationally mobile talent while reducing employment costs for employers (see our previous alert).

As a reminder, the key changes include:

• An increase in the maximum tax‑free reimbursement of costs proper to the employer from 30% to 35% of gross remuneration.
• The abolishment of the annual cap of EUR 90.000 for these tax‑free reimbursements.
• A reduction of the minimum annual salary requirement from EUR 75,000 to EUR 70,000.

The retroactive application of these changes raised a number of practical questions.
 

Circular letter providing clarity

The Belgian tax authorities have published a circular letter (2026/C/51) on April 1, 2026, in order to clarify and address some of the questions related to the retro-active implementation of the changes to the regime.  

1. Retro-active access to the regime for employments with start date between 01/01/2025 and 09/01/2026

The circular confirms the possibility to apply the regime retroactively to inbound taxpayers who started a Belgian employment between 1 January 2025 and 9 January 2026, provided that:

• They met all conditions of the regime, except for the former minimum salary threshold of more than EUR 75,000, and
• They meet the reduced minimum salary threshold of EUR 70,000

This clarification allows employers to reassess the eligibility of employees who were initially excluded solely due to the former minimum salary requirement of EUR 75.000.

For this specific category of taxpayers an application for the special tax regime should be or should have been filed by April 9, 2026, at the latest.

The specific retroactive application process and deadline is an exceptional measure, which is applied in a restrictive way, and does not apply to taxpayers who meet the EUR 75.000 minimum salary requirement or started their employment before January 1, 2025.
 

2. Retro-active application of the increased tax benefits

The circular furthermore confirms that the tax authorities will accept (retro-active) changes to the employment contract – subject to compliance with the relevant Belgian labour law provisions – in order to take into account, the increased benefits of the tax regime, which are applicable as of January 1^st, 2025.

This is accepted not only for employees who started an employment in Belgium after January 1, 2025, but also for employees who started working in Belgium before this date.

Contractual arrangements retroactively (back to January 1, 2025, at the earliest) in order to:

• increase the tax-free cost reimbursement e.g. from 30% to 35%, (and/or remove the EUR 90.000 cap on the expense reimbursement) and/or;
• lower the gross salary (below EUR 75.000, but not EUR 70.000) accordingly.

These retroactive changes should be included in the contractual agreements within three months following the publication of the circular letter, i.e. by July 1^st, 2026, at the latest.

Companies choosing to make use of this retro-active application of the increased benefits may as a result also need to:

• correct payroll reporting and withholding retro-actively
• issue rectifying salary forms for income year 2025
• review the impact of a “lower” salary on legal and extra-legal benefits or payments, such as pension, holiday pay, ….

The circular also clarifies that as a general rule an explicit reference to the special tax regime in the employment contract is not required in order to be able to benefit from the regime.
 

Why this matters: opportunities and action points

The clarifications provided by the circular create opportunities for both employers and employees:

• Existing beneficiaries may benefit from enhanced tax‑free allowances through a review of remuneration structures.
• Employers can reduce employment costs or increase net compensation without increasing total budget.

Given the retroactive effect and the window of three months to incorporate this into contractual agreements, a timely review of affected employee populations is strongly recommended.
 

How can EY help?

Our team is ready to assist and:

• screen your workforce for eligibility under the new rules.
• Advise on the retroactive and future implementation of the updated measures to optimize benefits while ensuring compliance and managing risk.
• Provide guidance on administrative formalities and deadlines.