Federal governmental agreement of 2025: tax measures from an international perspective

Expat regime

The new government wants to attract and retain international talent to strengthen Belgium's economic competitiveness. To achieve this, the existing expat regime will be made more attractive. This favourable tax regime provides benefits to foreign employees and company executives working in Belgium.

The current regime will change in three ways:

• The tax-free allowance will increase from 30% to 35% of the total annual gross salary.

• The annual cap of €90,000 on the tax-free allowance will be removed, allowing recurring expenses to be reimbursed tax-free by the employer.

• The minimum gross salary required to qualify for the scheme will be reduced from €75,000 to €70,000.

Cross-border employment

The new government plans to reduce the administrative tax burden for cross-border workers.

It will also tighten controls on cross-border employment. Abuse of secondment arrangements will be tackled and the government will examine whether tax controls on the 183-day rule can be improved using existing data from the National Social Security Office (NSSO).

Finally, the government intends to introduce cross-border recovery of social security contributions through a European mechanism.

Transfer pricing

The government wants to simplify transfer pricing documentation requirements, particularly for SMEs. This could reduce the administrative burden by focusing the documentation on the essential elements. However, the impact remains uncertain given the current thresholds for documentation requirements.

Investigation and assessment periods

The previous government extended the investigation and assessment periods for certain tax returns with an international component (e.g. companies with transfer pricing documentation obligations) from 3 to 6 years. This will now be reduced to 4 years from 1 January of the tax year, except in cases of fraud.

Digital tax

Current tax rules are not always adapted to the digitalised economy. Companies are currently taxed only in countries where they have a physical presence, not where their users are located.

To address these challenges, the OECD/G20 and the EU are working on initiatives for fairer taxation. Belgium is committed to the implementation of these international agreements. If no European or international agreement is reached by 2027, Belgium will introduce its own national digital tax.

Under the previous government, the implementation of a national digital tax was postponed due to progress in international discussions. However, with the withdrawal of the United States from the OECD agreement, a global consensus now seems out of reach.

New double tax treaties and automatic exchange of information

Belgium intends to expand and accelerate the ratification of its network of double tax treaties. Additional automatic information exchange agreements will be concluded, with a focus on emerging economies.

Exit tax

The coalition agreement introduces an exit tax for legal entities that relocate abroad. Specifically, it states that such a transfer will be treated as a deemed liquidation.

This situation already exists today, resulting in companies paying tax on their tax-free reserves and latent capital gains (corporation tax) when they relocate. However, under current legislation, this does not result in a taxable dividend for the shareholder. This interpretation was confirmed by the then Minister of Finance at the end of 2023.

With the new coalition agreement, the government seems to want to change this, although it remains unclear how this will be implemented. As such a measure may conflict with European freedoms, further monitoring is required.