The new federal coalition agreement: tax reforms for internationally active entrepreneurs
March 2025 - Does your company operate across national borders? Then keep a close eye on the following tax reform measures from De Wever I's federal coalition agreement. They can have a significant impact on your business activities over time.
Expat regime reforms
To make Belgium more attractive to international talent and strengthen the competitive position of the economy, the new federal government is making adjustments to the existing expat regime. This advantageous tax regime, which supports foreign employees and business leaders working in Belgium, is being modified in the following ways:
The tax-free allowance will increase from 30% to 35% of annual gross remuneration
The current limit of €90,000 for tax-free allowances will be abolished, making it easier for employers to reimburse recurring expenses tax-free
The minimum gross remuneration required to qualify for the expat regime will drop from €75,000 to €70,000.
Cross-border employment and control measures
The federal government wants to ease the administrative burden on cross-border workers and is taking measures to counter abuse of cross-border employment. For example, stricter controls are being introduced on the improper use of posting. In addition, it is examining how compliance with the 183-day rule can be better controlled by using existing rsz data.
Furthermore, a system for the cross-border collection of social contributions is being developed. This mechanism will be implemented through European cooperation so that contributions are effectively paid in the country where the work is performed.
Changes to examination and assessment deadlines
Previous tax reforms increased the examination and assessment deadlines for companies with an international component (such as those required to maintain transfer pricing documentation) from three to six years. The new coalition agreement reduces that period to four years from January 1 of the assessment year, with the exception of cases involving fraud.
Introduction of national “digital tax”
The digitization of the economy creates new tax challenges, since companies are now taxed mainly in the countries where they have a physical presence, rather than where their users are located. Belgium supports international initiatives by the OECD/G20 and the EU to address this problem. Should there be no agreement at the European or international level by 2027, Belgium will introduce its own national digital tax.
Transfer pricing: simplifying documentation requirements
The federal government has plans to relax documentation requirements around transfer pricing, especially for SMEs. Limiting the requirements to core information will reduce the administrative burden. However, it remains unclear to what extent these changes will be effective, taking into account the existing thresholds for documentation requirements.
Exit tax for companies
Are you moving your company's registered office abroad? If so, you may have to deal with an exit tax. For tax purposes, such a relocation is considered a fictitious liquidation.
This means that upon exit, companies must immediately settle their exempt reserves and deferred capital gains for corporate income tax purposes. Although current legislation does not provide for a taxable dividend for shareholders upon a seat transfer, it remains to be seen if this position will be revised under the new government. As recently as late 2023, the then Finance Minister confirmed that this tax exemption would be maintained.
Double tax treaties and data exchange
Belgium wants to conclude and approve new double tax treaties more quickly. Moreover, agreements will be extended to improve the automatic exchange of tax data, with a special focus on cooperation with emerging economies.
