What are the Arizona tax reforms for Belgian companies?

In a nutshell 

• VVPRbis  and liquidation reserve: harmonisation of regimes
• Modification of the ‘Definitively Taxed Income’ (DTI) regime for large companies
• 6% VAT rate on demolition/reconstruction
• The amended investment deduction
• Update on intra-group transfer taxation
• The new tax on DTI SICAV
• End of the exemption from capital gains on company vehicles
• Minimum executive remuneration for the reduced ISOC rate

 

Tax legislation is evolving, and with it, new opportunities and constraints for companies. Here is a summary of the main measures, adopted or announced by the government, to help you anticipate their impact on your financial and tax strategy.

What are the changes for the VVPRbis and the liquidation reserve?

For context: small companies have the option, under certain conditions, to distribute dividends by benefiting from a reduced rate of withholding tax on income from movable property assets, instead of the standard rate of 30%. 2 schemes enable this: the VVPRbis regime and the liquidation reserve.

The preferential VVPRbis regime applies only to new shares issued on or after 1 July 2013 (when the company is formed or its capital is increased). These shares must be fully paid up, registered and cannot be transferred (with a few exceptions). The VVPRbis regime then provides that dividends distributed by small companies may benefit from the following preferential rates:

• 20% if the distribution takes place after a 2-year holding period
• 15% if the distribution takes place after a waiting period of 3 years or more

Note that for contributions and incorporations made after 31 December 2025, the rate increases to 30% if the dividend is distributed before the 4-year waiting period.

Small companies may also choose to allocate their profits after taxation to a liquidation reserve. This operation entails the payment of a specific contribution of 10% at the time of allocation.

When this reserve is subsequently distributed, an additional deduction is applied, with rates varying according to the time elapsed:

• 5% if the distribution occurs after a minimum of 5 years
• 20% if it takes place before the expiry of this 5-year period
• 0% (no deduction) if the reserve is only distributed at the time of the company’s definitive liquidation 

The Programme Law of 18 July 2025 introduces modifications to harmonise these 2 regimes. The minimum holding period before being able to benefit from a reduced rate on distributions from the liquidation reserve is now reduced from 5 to 3 years, aligning this regime with that of the VVPR bis. However, the withholding tax rate on income from movable property applied to these distributions increases from 5% to 6.5%. These modifications concern reserves built up from 1 January 2026. Taxpayers have an optional regime for reserves built up before this date. If a distribution occurs before the expiry of the 3-year period, it will be subject to the standard rate of 30%, regardless of the regime (VVPR bis and liquidation reserve).

Furthermore, the government agreement on the 2026 budget announces that the effective tax rate of the VVPRbis and the liquidation reserve will be increased from 15 to 18% (liquidation reserves already built up should not be affected).

How is the DTI regime changing for companies?

Does your company receive and include in its taxable income dividends from profits on which the distributor has already been taxed? If so, you can benefit from the Definitively Taxed Income (DTI deduction and therefore avoid double taxation. Below are the eligibility conditions:

• Your company holds a full ownership interest in the capital of the distributor company of at least 10% for a minimum of one year.
  
  Or
  
  
• Your company holds a full ownership interest with an acquisition value of at least €2.5 million for a term of at least one year. In the latter case, the legislator adds an additional requirement: if your company is considered a large company, your participation must be classified as a financial fixed asset.

The idea is to allow only large companies wishing to establish a lasting and specific link  with their subsidiaries to benefit from the DTI regime. As a result, many wealth management and financial sector companies, for example, could therefore be denied the benefit of this measure for some of their investments in the future.

What are the conditions for the 6% VAT rate on demolition/reconstruction?

Since 1 July 2025, sales of demolished and then rebuilt homes again qualify for a permanent VAT rate of 6%, provided the following general terms and conditions of the regime are met:

• The property is intended to become the buyer’s primary residence, thereby establishing their domicile immediately upon acquisition.
• The total living area may not exceed 175 m². This use must be maintained until 31 December of the fifth year following the year of first occupation.
• The home is intended to be rented out to a social housing agency, a social housing company or another public or private entity with a social purpose. This use must be maintained until 31 December of the fifteenth year following the year of first occupation.
• For homes of less than 175 m², long-term rental to a direct occupant is permitted. This use must be maintained until 31 December of the fifteenth year following the year of first occupation.

In each case, if the conditions are no longer met, the person who acquired the asset must settle the tax benefit they received from that asset.

What are the advantages of the investment deduction?

The Law of 18 December 2025, which introduces various provisions, modifies the rules relating to the deduction for investment in the context of corporate income tax. The basic investment deduction can now be carried forward without a time limit, whereas it was previously restricted to year N+1 with no amount limit. This measure applies to all categories of investment. In addition, the text removes the restriction prohibiting the cumulation of this deduction with regional aid regarding the thematic deduction. It also unifies thematic investment deduction rates to 40%, for both small and large companies.

The depreciation regimes could also be subject to a new measure, which has yet to be confirmed. As a result, certain investments may be subject to accelerated depreciation. These would be investments related to research and development, defence and energy transition. This measure will apply to all companies, although large companies will only benefit from this for a limited term. It will allow 40% of the acquisition value to be depreciated from the first year.

In addition, SMEs may use a degressive depreciation for their investments.

Intra-group transfer and adaptation of the DTI regime: compliance with the mother-daughter directive and tax optimisation

The tax consolidation regime allows a profitable company to transfer all or part of its gains to another company of the same group at a loss during the same financial year. This transaction, known as an intra-group transfer, allows a beneficiary company to transfer (part of) its profits for tax purposes to a group company that has suffered a loss during the same financial year. As a result, the former sees its tax burden decrease, while the latter limits the carry-forward of its losses to the subsequent financial years.

However, if the amount of the transfer exceeds the beneficiary company’s annual loss, the surplus is treated as a minimum taxable base, initially excluding any application of the deduction for definitively taxed income (DTI). The Court of Justice of the European Union, however, ruled that this exclusion was contrary to the Parent-Subsidiary Directive. To comply with this opinion, a legislative reform was adopted: it now authorises the application of the DTI deduction on the portion of the intra-group transfer that exceeds the annual loss.

What is the new tax on DTI SICAVs?

When your company invests in a DTI SICAV, it benefits from the tax advantages of the DTI deduction, without the usual constraints (permanence and minimum participation). However, under the Law of 18 December 2023 on various provisions, an additional 5% charge will now apply to exempt capital gains upon exit provisions.

This 5% charge on capital gains may not apply in most cases to DTI SICAVs. Since these companies are not listed on the secondary market, investors typically exit by redeeming their shares through the SICAV itself - a mechanism that is not considered a taxable ‘transaction’.” Profits (redemption or liquidation bonuses) are therefore exempt from this new charge, preserving most of the tax benefit.

In addition, the right to charge withholding tax on income from movable property tax on dividends distributed by a DTI SICAV will depend  on compliance with the minimum remuneration of the director (€45,000 annually, or €50,000 if the proposed measure is ultimately adopted).

Abolition of the capital gains exemption for commercial vehicles

To date, capital gains from the sale of commercial vehicles, whether for paid passenger transport or goods transport, have been tax exempt. This exemption required reinvesting the proceeds into a new vehicle used for economic activity, provided it met environmental and safety standards as defined by regulation.

This exemption will be abolished for all capital gains realised as from 31 Aug 2025.

What is the minimum remuneration threshold for executives to qualify for the reduced rate of corporate income tax?

Currently, small companies benefit from the reduced rate of tax (20%) on their first €100,000 of taxable income, provided that they grant their manager a minimum remuneration of €45,000. If this threshold is not reached, the remuneration must be at least equal to the company’s taxable income. This minimum remuneration may now increase to €50,000 per year instead of €45,000. Remuneration that could be indexed and of which a maximum of 20% could consist of benefits in kind. At this stage, this measure is only part of the draft law on reform of the personal income tax.
Other tax proposals are still under review and may be the subject of legislation in the near future or amendments before their final adoption. We will monitor their progress closely and will keep you informed as soon as any clarifications or adjustments are made.

In an ever-changing tax environment, your strategic and operational needs are also changing. Our teams continuously analyse regulatory changes to support you with tailored solutions, aligned with the specificities of your business.

Any doubts or questions? Your relationship manager is here to assist you with your strategic choices.