From 2026, Belgium’s tax changes include stricter participation exemption rules, exit tax on cross-border reorganisations, a permanent 6% VAT for residential demolition/reconstruction, and higher VAT on coal and fossil fuel boilers.
The Belgian Chamber of Deputies approved a draft law on 17 July 2025, aimed at implementing specific tax reform measures outlined in a government policy note from April 2025.
This follows the Chamber of Deputies’ review of a draft law submitted on 3 July 2025, to implement measures outlined in the government’s tax reform policy note of April 2025.
The main measures of the law are:
Participation exemption
If the 10% ownership requirement isn’t fulfilled, but the EUR 2.5 million threshold investment is, then the investment must qualify as a fixed financial asset (small businesses are exempt). This goes into effect from the 2026 assessment year.
Exit tax rules
A taxable “liquidation dividend” applies when a Belgian company relocates its management abroad or undergoes an outbound cross-border reorganisation, except when the assets remain in a permanent establishment in Belgium.
VAT changes
- A permanent 6% VAT rate is established for residential demolition/reconstruction.
- The VAT on coal is increased from 12% to 21%.
- The VAT on fossil fuel boilers has been increased from 6% to 21%.
Liquidation reserve & VVPR-bis regime
- The holding period for liquidation reserves has been reduced from 5 to 3 years.
- The withholding tax on new liquidation reserves has been increased from 5% to 6.5%, resulting in an effective rate of 15.0% (an increase from 13.64%).
- The VVPR-bis regime rate is set at 30% for distributions in the first three years, then 15%.
Tax penalty amendments
Automatic waiver of the 10% tax increase for first violations in good faith, except in cases of ex officio assessments.
Most measures take effect upon publication in the Official Gazette.
