Key proposals include a 5% capital gains tax, a participation exemption for group contributions, revised deductions, and revised statute of limitations rules.

Belgium’s Chamber of Deputies is reviewing a draft law submitted on 3 July 2025 to implement measures outlined in the government’s April 2025 tax reform policy note. The government submitted the bill on 7 July 2025.

This follows the Belgian Chamber of Representatives’ release of a policy note on 24 April 2025, detailing its tax reform plans for the upcoming year.

The key proposals include introducing a separate 5% tax on capital gains, participation exemption for group contributions, revised deductions, and statute of limitation rules. Unless stated otherwise, these measures will take effect from the 2026 assessment year.

The tax reform measures are:

Capital gains tax

A new 5% tax on capital gains from shares in certain investment companies, previously exempt under the participation exemption, has been introduced. The withholding tax credit on dividends is allowed only if the receiving company pays its directors a minimum wage of EUR 45,000.

Participation exemption

The participation exemption on profits from intra-group transfers has been extended to comply with a March 2025 ruling by the CJEU.

Investment deduction

The reforms proposed the removal of the carried-forward investment deduction limit, harmonisation of the rate to 40% for all companies, and a 10% increase for small companies investing in digital assets.

Statute of limitations

The statute of limitations period will be retroactively amended, effective as of 2023. The proposal suggests standardising the statute of limitations to 4 years for most cases, with an extended period of 7 years for tax fraud cases, reduced from the current 10 years.

Car taxation

The maximum personal income tax deduction for hybrid cars will decrease over time as follows:

  • 75% for vehicles purchased, leased, or rented before 1 January 2028.
  • 65% for vehicles purchased, leased, or rented in 2028.
  • 57.5%  for vehicles purchased, leased, or rented in 2029.
  • 0% for vehicles purchased, leased, or rented from 2030 onwards.
  • The fuel costs deductions will be abolished from 2026.

Expat regime enhancements

These proposals were set forward to make the expat regime more attractive and will retroactively apply from 1 January 2025. These are:

  • Tax-free expense reimbursement increased from 30% to 35%.
  • EUR 90,000 reimbursement cap abolished.
  • The minimum gross salary requirement has been reduced from EUR 75,000 to EUR 70,000.