New Program Law: higher withholding tax on VVPRbis dividends and liquidation reserves from 1 July 2026

VVPRbis dividends: withholding tax increases from 15% to 18%

Until now, small companies could distribute dividends under the VVPRbis regime at a reduced withholding tax rate of 15%, provided the distribution took place from the third financial year following the capital contribution.

As of 1 July 2026, this rate will increase to 18%.

What does this mean in practice?

• Dividends distributed or made payable on or before 30 June 2026 will continue to benefit from the 15% rate.

• Dividends distributed or made payable from 1 July 2026 onwards will be subject to an 18% withholding tax rate.

Tip! Small companies that still wish to benefit from the favourable 15% rate may consider distributing an interim dividend before 1 July 2026. It is advisable to discuss this with your accountant in due time.

Liquidation reserves

The legislator is also increasing the withholding tax applicable to liquidation reserves. The current rate of 6.5% for distributions made after a three-year waiting period will increase to 9.8%.

An overview of the applicable withholding tax rates is provided below.

Liquidation reserves created in financial years ending on or before 30/12/2025

• 20% withholding tax on dividends distributed before the expiry of the 3-year waiting period

• 6.5% withholding tax on dividends distributed after a waiting period of 3 years but before 5 years

• 5% withholding tax on dividends distributed after a waiting period of 5 years

Liquidation Reserves created in financial years ending on or after 31/12/2025

• 30% withholding tax on dividends distributed before the expiry of the 3-year waiting period

• 9.8% withholding tax on dividends distributed after a waiting period of 3 years (previously 6.5%)

Anti-abuse provision

The legislator also aims to prevent structures whereby entrepreneurs or company directors liquidate their company in order to distribute liquidation reserves under favourable tax conditions and subsequently restart the same activities through a new company.

To address this, a specific anti-abuse provision has been introduced.

What are the consequences?

In such situations, the dividends received may still be taxed as movable income under personal income tax rules.

The company director must personally declare the received liquidation reserves in the appropriate sections of the personal income tax return, depending on the applicable withholding tax rate (30%, 20%, 9.8%, 6.5% or 5%).

When does the anti-abuse provision not apply?

The measure does not apply when:

• the activity is only resumed after a period of at least three years; or

• the taxpayer can demonstrate that the transaction is economically justified and not aimed at obtaining a tax advantage.