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The federal government has approved, in a second reading after legal vetting by the Council of State, a draft program law which contains a first series of tax measures included in the government agreement. The measures included in the draft program law are foreseen to enter into force as from 1 July 2025. The non-urgent measures included in the pre-draft law (see our earlier newsletter), as well as other measures in the coalition agreement, such as the capital gains tax, will be incorporated in other laws later. The draft program law has been sent to Parliament for adoption. It is expected that the program law will be adopted and published in the Belgian Official Gazette before 1 July 2025.

The draft program law contains the following tax measures:

While the federal government announced the conversion of the deduction into an exemption, this will be covered in later legislation. The current draft program law already changes the terms of the regime. The minimum participation requirement of 10% remains, as well as the alternative acquisition value threshold of EUR 2,5mio. However, in the latter case, the participation must also be recorded as a financial fixed asset in compliance with accounting law, if the dividend-receiving company is not a small company. The same changes apply for the exemption from withholding tax for qualifying non-residents. The changes will apply as from assessment year 2026 (in respect of withholding tax as from 1 July 2025). Any change to the closing date of the financial year as from 3 February which is not justified by other motives than avoidance remains without effect.

A specific individual income tax regime will be introduced in order to provide legal certainty on the nature of the income of carried interest structures. Carried interest will be taxable as movable income at a (withholding tax) rate of 25%.

Carried interest will be generally defined as the part in the profits of a Belgian or foreign alternative institution for collective investment (AICB/OPCA) received by an individual who exercises activities, directly or indirectly, for the AICB or its manager (regardless of whether the profit is distributed via dividends, interest, capital gains or redemption or liquidation boni), in excess of the return on investment for a non-carried interest beneficiary. Carried interest does not include income from shares received as a result of the exercise of stock options in accordance with the law of 26 March 1999.

The new regime will enter into force as from the date of publication of the program law in the Belgian Official Gazette and will be applicable on income attributed as from that day. Exception is made for income from an AICB/OPCA already in liquidation at the date of entry into force.

The liquidation fiction (deemed dividend), which already exists at the level of the Belgian company, will as from 1 July 2025 also apply to shareholders, following transactions such as the transfer of seat and reorganizations resulting in the transfer of assets abroad. The deemed dividend is taxable at a rate of 30%. In the case of a corporate shareholder, the dividends received deduction can apply. Double taxation (in case of a later effective dividend) will be avoided by exempting the later effective dividend to the extent of the deemed dividend. Since withholding tax cannot be levied at the time of the deemed dividend distribution, the deemed dividend must be declared in the tax return. Shareholders must receive individual statements; otherwise, the company will face the secret commissions tax (100%). For transfers within the EEA, payment of the tax can be immediate or spread. The new exit tax enters into force on 1 July 2025 and applies to above-mentioned transactions that have taken place as from that date.

For all liquidation reserves a distribution at a reduced withholding rate of 6,5% will be possible after 3 years, while a distribution of liquidation reserves created before 31 December 2025 after 5 years remains taxed at 5%. However, for liquidation reserves created after 31 December 2025, an early distribution within 3 years will be subject to a 30% withholding tax rate, in addition to the taxation at 10% at the time of creation (instead of the current additional 20% within 5 years).

For the VVPRbis, the reduced withholding tax rate of 20% on dividends from profit distributions of the second financial year following contribution will be phased out. It will only apply to dividends from contributions made until 31 December 2025.

The changes will be applicable to dividends distributed as from 1 July 2025.

Following the report of the Court of Audit (i.e., Rekenhof/Cour des Comptes), two rebuttable presumptions of tax abuse will be introduced. The rebuttable presumptions relate to the following transactions: (i) the conversion of financial instruments held in a taxable securities account (i.e. total value of taxable financial instruments in the relevant account exceeds EUR 1,000,000) into nominative financial instruments that are not held in a securities account and (ii) the transfer of part of the securities from a taxable securities account into one or more other securities accounts, in so far the accountholder of the first account is also (co)accountholder of the account(s) to which the securities are transferred. Both presumptions can be rebutted if the accountholder proves that the transaction is primarily justified by other motives than avoidance of the tax.

Additionally, the program law will introduce a reporting obligation to enable effective monitoring of the proposed measure for Belgian financial intermediaries (cf. Belgian securities accounts) and for accountholders (cf. non-Belgian securities accounts), the details of which will be elaborated in secondary legislation (i.e. Royal Decree). Non-compliance with the reporting obligation will be subject to fines ranging from EUR 250 to EUR 2.500.

The tax that will be due as result of the (rebuttable) presumption, will need to be declared and paid by the accountholder himself/herself.

The proposed changes will apply as from 1 July 2025 and the reporting obligation will have to be carried out for the first time by 31 October 2025.

The rate structure of the flight tax (also referred to as embarkation tax) will be simplified. The tax rate will be EUR 10 for flights up to 500 km, and EUR 5 in other cases (instead of EUR 2 or 4). The new rates will apply as from 1 July 2025.