Reduced rate of Belgian corporate income tax and director remuneration: what’s changing in 2026

New rules regarding the reduced rate: key points

• In Belgium, small companies can benefit from a reduced 20% corporate income tax rate on their first €100,000 of profits. 
• To qualify, the annual remuneration of at least one company director must reach a minimum threshold. 
• In 2026, that threshold will rise from €45,000 to €50,000, or will be equal to the company's taxable profit if lower, as is already the case. 
• Benefits in kind cannot make up more than 20% of that remuneration. 
• The minimum threshold of €50,000 will be adjusted each year in line with the consumer price index. 
• These changes are intended to apply to 2026 income but are not yet applicable, because the related legislation has not yet been passed. 

A reduced 20% rate for small companies

"In Belgium, corporate income tax is levied at a flat rate. This represents a big difference compared with the progressive tax system that applies to natural persons, with different rates for different income categories," explains Tom Van Coningsloo.

"The standard corporate income tax rate is 25%. It applies to all of a company's taxable profit, regardless of how big the profit is or what legal form the company has. But there's one exception: small companies can qualify for a reduced rate of 20% applied to their first €100,000 of taxable profit. The 25% rate still applies to any profit above that €100,000 threshold." 

How is a small company defined?

According to the Belgian Code of Companies and Associations, a company is regarded as a small company if, during a period of two consecutive accounting periods, it exceeds no more than one of the following three thresholds:

• 50 employees (full-time equivalent, annual average)
• Revenue of €11,250,000
• Total assets of €6,000,000

There is another key detail concerning related companies: each company's thresholds are added together, and the resulting thresholds apply on a consolidated basis.

Minimum remuneration of business directors: rising from €45,000 to €50,000

To benefit from the reduced corporate income tax rate, small companies must meet certain conditions. The main condition concerns the remuneration of company directors.

"The annual remuneration of at least one company director must reach a minimum threshold for a company to qualify for the reduced tax rate on its first €100,000 of profits," says Tom Van Coningsloo. "That minimum threshold was previously €45,000, but is rising to €50,000 as part of the federal government's reforms. It's also worth noting that start-ups are exempt from the minimum remuneration requirement for their first four accounting periods."

What does a company director's remuneration include?

"A company director's remuneration is what the company pays them in cash and in kind," adds Tom Van Coningsloo. "So it includes gross salary and any "tantièmes" (director profit-sharing benefits), but also the value of any benefits in kind, such as a company car, accommodation and stock options. The total remuneration figure is subject to personal income tax."

What is a "tantième"?

A "tantième" is a benefit that a company may pay to its directors based on its profit for a given accounting period, and is to some extent similar to a dividend paid to shareholders. It's awarded after the end of the accounting period on which it is based, at the time of the AGM in which shareholders approve the company's annual financial statements and decide how to allocate the profit it has made.

"Since the "tantième" forms part of a company director's remuneration, it can be used to adjust that remuneration, particularly in order to ensure that it reaches the minimum threshold to qualify for the reduced tax rate," adds Tom Van Coningsloo. "To take an example: you're a company director and your company made a significant profit in 2026. In 2027, the company could decide to award you a "tantième". It will be paid in 2027 and included in your company director remuneration for 2027. For the company, however, the "tantième" awarded in its 2027 AGM will be deducted from its 2026 profit."

20% limit on benefits in kind and annual index-linking of the remuneration threshold

Another important change is that to be taken into account in the remuneration calculation, benefits in kind valued on a flat-rate basis cannot exceed 20% of a company director's remuneration. "If a director's remuneration includes a large benefit in kind – for example if they have the use of a property belonging to the company – it may be necessary to increase the amount of salary paid to that director in cash," says Tom Van Coningsloo.

In addition, the minimum remuneration threshold that must be reached to benefit from the reduced tax rate will now be index-linked. Tom Van Coningsloo: "The minimum remuneration threshold was increased from €36,000 to €45,000 for tax returns completed in 2019, but has remained at the same level ever since. The rules are now changing: the minimum threshold will rise to €50,000 and will be linked to the consumer price index."

Rules not yet in force pending a vote in parliament

The new rules are intended to apply to 2026 income (included in tax returns completed in 2027), but Belgian's Chamber of Representatives has not yet voted on the relevant bill. "The rules are not yet in force, and that will remain the case until parliament passes the relevant bill. As soon as it does, the rules will apply to accounting periods taken into account in tax returns completed in 2027, which in many cases are already underway," confirms Tom Van Coningsloo.

But what should companies and company directors do given the resulting uncertainty?

"Each situation is different and should be analysed with the company's accountant or tax specialist. It's reasonable to expect that the bill will be voted through and come into force in 2026, so I think it's already worth looking at scenarios that take into account the new rules. If increasing a director's remuneration seems sensible, a company could do that in the last few months of the year. It could even do this by awarding a "tantième", which would be added to the director's remuneration. It's also a good idea to consider other factors, not just the tax consequences. For example, if someone receives remuneration as a company director, this can affect their state pension and the amount that person can pay into an EIP (a company pension plan for self-employed people who run companies) or a PLCI (supplementary personal pension plan for self-employed individuals)."

DRD SICAV funds: also relevant to a company director's remuneration

It's worth noting one final change related to the new minimum threshold for company director remuneration, even though it doesn't affect the reduced rate of corporate income tax. "This concerns DRD SICAV funds, where DRD means "dividends received deduction". Many companies invest in this type of fund in order to make a return on their cash. DRD SICAV funds allow a company to benefit from the DRD regime without having to fulfil all the conditions, such as a minimum stake of 10% or €2,500,000 in the company whose shares are held via the SICAV. Dividends paid by the SICAV are subject to a 30% withholding tax. But the dividends do not give rise to any tax liability for the company and the withholding tax can be recovered or deducted from the company's taxable profit, which is obviously beneficial for the company. However, a company will have pay minimum remuneration of €45,000 – or €50,000 when the bill is passed – to at least one of its directors in order to deduct the withholding tax from its taxable profit. The principle according to which dividends do not give rise to any tax liability for the company has already been voted through, and is therefore fully applicable," concludes Tom Van Coningsloo.