Survey of the Belgian Program-Law adopted in July 2025

Recently, Parliament has adopted the 2025 Program Law, introducing a first wave of tax measures under the Arizona coalition. These changes, many of which take immediate effect upon publication in the Belgian Official Gazette, will significantly impact corporate structuring, investment strategies, and compliance obligations. Below is a brief overview of the most relevant measures:

• Carried Interest Taxation

A new regime taxes the “disproportionate return” in carried interest at a flat 25% personal income tax rate. It applies only to individuals receiving carried interest directly from qualifying AIFs—not via service companies or stock options.

• Exit Tax on Shareholders

A new exit tax applies when a Belgian company relocates or undergoes a cross-border reorganization. Shareholders may face a “dry tax charge” on latent gains, even without receiving cash. Compatibility with EU law is questionable.

• Participation Exemption Tightened for SH excluding small companies

For corporate shareholders holding <10% but investing ?€2.5M, the shares must now qualify as ‘fixed financial assets’ to benefit from dividend and capital gains exemptions. This introduces a subjective, factual test likely to trigger disputes.

• Withholding Tax Alignment for Small Companies

The waiting periods for reduced 15% withholding tax under the “VVPR-bis” and “liquidation reserve” regimes are now harmonized.

• Cap on Employer Social Security Contributions

A cap is introduced for base salaries above €85,000/quarter (2025–2026), decreasing to €67,500 from 2027. This may prompt a review of executive compensation structures.

• Presumption of Good Faith for First Violations

First-time tax filing violations will now benefit from a rebuttable presumption of good faith, avoiding the standard 10% tax increase and potential minimum tax base implications.

• Permanent Regularization Regime

A permanent system for tax and social security regularizations is introduced, offering immunity for voluntary disclosure (subject to a plethora of rates and exclusions).

• Anti-Abuse Rules for Securities Tax

New presumptions of abuse target account splitting and conversion of dematerialized to registered securities to avoid the 0.15% annual tax on securities accounts.

• VAT Reform

The 6% VAT rate for demolition-reconstruction is made permanent and broadened. VAT rates on non-eco-friendly products (for example; coal, fossil fuel boilers) are increased to align with environmental goals.

• Aircraft Embarkation Tax

Rates are simplified and increased: €5 for flights >500 km, €10 for shorter flights.

Measures still to come:

Further reforms are expected later this year, including:

• A new 10% capital gains tax on financial assets
• Reforms to the tax consolidation regime
• Conversion of the dividend received deduction into a full exemption
• New taxes on capital gains from exempt investment structures
• Changes to the investment deduction and expat regimes