Reduced Corporate Tax Rate: Watch Out for Benefits in Kind from 2027 Onwards

Starting from assessment year 2027 (financial year 2026), an additional condition will apply to benefit from the reduced corporate income tax rate in Belgium.

Companies may now lose access to this reduced rate if more than 20% of the remuneration of their company directors consists of lump-sum valued benefits in kind.

This measure will mainly affect directors benefiting from significant advantages such as:

• company cars ;
• company-owned housing provided free of charge ;
• computers or private equipment paid by the company ;
• other benefits valued on a lump-sum basis.

A Rule That Could Become Costly

In practical terms, if benefits in kind exceed 20% of the director’s total remuneration package, the company could lose access to the reduced corporate tax rate.

In some situations, the financial impact may become significant.

It is therefore important to anticipate this new rule now in order to avoid unpleasant surprises when closing the 2026 financial year.

Two Possible Solutions

To remain below the 20% threshold, two approaches are possible:

• increase cash remuneration ;
• reduce benefits in kind.

In practice, however, completely removing certain benefits is rarely realistic.

Giving up the private use of a company car or moving out of a company-owned property solely to preserve the reduced tax rate is often difficult to envisage.

A Smarter Solution: “Buying Back” the Benefits

A more flexible strategy consists of compensating the company for the private use of these benefits.

For example, when a director pays compensation for the private use of a company car or company-owned housing, this contribution reduces the taxable benefit in kind.

And if the compensation fully covers the lump-sum value of the benefit, the taxable benefit may even disappear entirely.

This compensation can:

• be effectively paid ;
• or be booked through the director’s current account.

Combining Salary Increases and Benefit Buybacks: Often the Most Efficient Strategy

In many situations, the optimal approach consists of:

1. slightly increasing cash remuneration ;
2. using part of the additional net salary to “buy back” part of the benefits in kind.

This approach often makes it possible to stay below the 20% threshold with a much smaller salary increase.

Practical Example

A company director receives:

• €55,000 in cash remuneration ;
• €18,000 in benefits in kind.

The benefits therefore represent nearly 25% of the total remuneration package.

To reduce this ratio below 20% solely through a salary increase, the cash remuneration would need to rise to approximately €72,000.

However, a more efficient strategy may consist of a more moderate salary increase combined with using part of the additional net salary to compensate the company for part of the benefits.

In this example, a much smaller salary increase could already be sufficient to comply with the 20% threshold.

A Case-by-Case Analysis Remains Essential

Each situation should naturally be reviewed individually, taking into account:

• the remuneration structure ;
• the level of benefits ;
• social security and tax impacts ;
• the director’s current account position ;
• the overall optimisation of both the company and the director.

A proactive review during 2026 may often help avoid more expensive adjustments later on.