Belgium's parliament has moved to overhaul its individual income tax system, backing a sweeping reform bill that will more than triple the tax-free income threshold by 2031, phase out decades-old income-splitting benefits for non-working spouses, and introduce new incentives for the self-employed and low-wage earners — pending royal assent.
Belgium’s Financial and Economic Committee of Parliament has adopted an individual income tax reform bill (Bill No. 56 1243/005) on 16 June 2026, introducing several key changes, including higher tax-free thresholds, a gradual elimination of income splitting benefits for non-working spouses, and a new deduction for self-employed entrepreneurs.
The primary focus of the legislation is a multi-year plan to increase the tax-free allowance, gradually raising the exempt income threshold for citizens through 2031. It details specific adjustments to tax reductions for various forms of income, including pensions and replacement revenues, while introducing new criteria for household compositions. The bill also proposes changes to the conjugal quotient, establishing specific limits on income-sharing for tax purposes based on the age of the spouses.
Furthermore, it provides a clear timeline for implementation, specifying exactly which fiscal years will be affected by each amendment.
Increase in tax-free allowance
The tax-free income threshold will be significantly raised in stages, moving from EUR 4,785 to EUR 14,450 by 2030 (after indexation) and reaching a final target of EUR 15,600 in 2031.
Phase-out of the conjugal quotient
The tax advantage allowing income splitting between spouses will be gradually reduced. It will be phased down over time and is expected to be fully abolished for most taxpayers by 2046, with earlier reductions applying from 2027 to 2030 depending on age group.
Introduction of entrepreneur deduction
A new deduction for self-employed individuals will be introduced, equal to 10% of professional profits (after losses), subject to caps that increase from EUR 311 in 2028 to EUR 415 from 2030.
Taxation of integration income
Integration income (social assistance benefits) will become taxable in principle, but a targeted tax credit will be introduced for dependent children in households primarily relying on this income, with the credit gradually decreasing as the tax-free allowance rises.
Limits on excessive fringe benefits
A new rule targets high-value fringe benefits, treating benefits exceeding 20% of total remuneration as excessive and applying a separate 7.5% tax rate on the excess portion.
Incentives for work and employment
The reform introduces measures to encourage work, including an exemption for up to 240 hours of voluntary overtime and increased employment bonus rates for low-wage earners, rising progressively by 2029.
The bill still requires approval by Parliament and must be formally signed into law by the King before it can take effect.
