Programme Law finally published: which tax provisions are now officially in force?

Liquidation reserve

This measure is relevant for many SMEs, as over €10 billion is set aside annually in liquidation reserves. The Programme Law modifies this system as follows:

• The 5-year waiting period can be reduced to 3 years, in which case a withholding tax of 6.5% is due instead of the usual 5%.

• Existing reserves can still be held for 5 years and then distributed at 5%, but only for liquidation reserves established by 31 December 2025 at the latest.

• Liquidation reserves set up from 1 January 2026 onwards can only be distributed at a 6.5% withholding tax (after a 3-year waiting period), or will be subject to 30% withholding tax if distributed earlier.

As of 29 July 2025, liquidation reserves established by 31 December 2025 may be distributed at 6.5% provided they have been held in the company for at least 3 years.

No withholding tax is due in the event of the company’s liquidation.

VVPRbis scheme

Under this regime, certain SMEs can distribute dividends subject to 15% withholding tax starting from the profit distributions of the third financial year following the capital contribution or increase.

Distributions from the second financial year after the contribution or increase will only qualify for the 20% rate for contributions made up to and including 31 December 2025.

Contributions from 1 January 2026 onwards will be subject to 30% withholding tax for distributions made up to and including the second financial year following the contribution.

Dividends Received Deduction (DRD)

Thanks to the DRD, dividends received by a company can be fully exempt from corporate income tax, provided a number of conditions are met.

From assessment year 2026 onwards (already ongoing for most), these conditions become stricter for large companies. The DRD may only apply to participations that qualify as financial fixed assets (i.e. that reflect a lasting relationship).

Leaving Belgium: more exit tax?

Currently, companies moving their seat out of Belgium are subject to an exit tax. The company is deemed to be liquidated for tax purposes and taxed accordingly. Shareholders receiving a liquidation bonus were not taxed.

That now changes. For relocations from 29 July 2025 onwards, the underlying shareholders will also be taxed if the company’s assets are no longer used or kept in Belgium.

Additionally, as of 29 July 2025, the rates for the "boarding tax for air travel" (aviation tax) will increase.

Tax regularisations or voluntary disclosures become possible again

Taxpayers who have "forgotten" to declare income can again make use of a voluntary disclosure scheme. The penalty is:

• 30% surcharge on the normal tax rate for income that is not 'expired'

• 45% for capital for which the limitation period has expired

A social regularisation is also introduced. For unpaid, non-expired social contributions, a 20% social surcharge will apply. No social rights will be accrued in return.

VAT on demolition and reconstruction

The regime for the sale of demolished and rebuilt homes is reintroduced permanently, but with some adjustments.

It continues to apply to:

• A property used by the buyer as their sole and main residence (for at least 5 years);

• A property intended for long-term rental via a social rental agency or similar institution (for at least 15 years);

• Additionally, now also to a property purchased for the purpose of renting to a private individual who will immediately establish their domicile there, for a minimum of 15 years.

Another change concerns the habitable surface, which is now limited to 175 m² (instead of 200 m²) for an own home or one rented to a private individual. In other cases, such as demolition and reconstruction by a private builder, the 200 m² limit still applies.

For purchases intended for long-term rental through a social housing organisation, there is no limitation on habitable surface area.

These changes were initially set to enter into force on 1 July 2025. The tax authorities allow application of the reduced 6% VAT rate from 1 July 2025, provided the conditions of the Programme Law are met.

VAT on heating systems

As of 29 July 2025, the reduced 6% VAT rate will no longer apply to heating systems that run on fossil fuels. This concerns boilers as well as associated parts such as burners and control equipment connected to the boiler. This change applies to construction works on immovable property in the context of renovations and under the demolition and reconstruction regime.

For rebuilt homes sold under the demolition and reconstruction regime, the exclusion already applies from 1 July 2025, as the new rules apply to VAT that becomes chargeable from that date.

However, the reduced 6% VAT rate remains possible in two cases:

• For renovation works and demolition-reconstruction projects where the agreement was signed no later than 28 July 2025;

• For the sale of a rebuilt home under the demolition-reconstruction regime where the agreement was signed no later than 30 June 2025.

In both cases, VAT must become chargeable no later than 30 June 2026.

The tax authorities will not challenge this if the parties can provide at least one of the following documents (except in cases of abuse or collusion between parties):

• A quote signed by the customer no later than 28 July 2025 (for construction works), with verifiable date (e.g. email);

• A signed agreement between parties dated before 28 July 2025 (for construction works) or 30 June 2025 (for delivery);

• Proof of payment made by 28 July 2025 (construction works) or 30 June 2025 (delivery), clearly referencing the quote or agreement;

• An (advance) invoice issued before 28 July 2025 (construction works) or 30 June 2025 (delivery), with sufficient detail to justify the 6% rate.