Personal Income Tax Reform: What Will Change from 2026?

The personal income tax reform adopted by the Belgian Parliament on 9 July 2026 is one of the most significant tax changes in recent years. Its primary objectives are to increase purchasing power, encourage employment, and modernise several outdated tax rules.

While some measures will directly benefit employees, others will have a substantial impact on businesses, company directors, self-employed professionals and households.

Lower taxes on employment income

One of the key measures is the gradual increase in the tax-free allowance. As a result, a larger portion of employment income will no longer be subject to income tax, allowing employees to keep more of their net salary over the coming years, with the full implementation planned by 2030.

In addition, the tax work bonus will be strengthened to further improve the net income of lower-paid employees.

More attractive overtime rules

The reform also provides greater certainty for employers regarding overtime work.

The number of tax-advantaged overtime hours is permanently set at 180 hours per year for most sectors, with retroactive effect from 1 January 2026.

Employees will also be allowed to perform up to 240 voluntary net overtime hours, fully exempt from income tax and withholding tax where no overtime premium is due.

These measures are intended to give employers greater flexibility while increasing employees’ take-home pay.

Changes affecting families

The reform also modifies several tax benefits available to households.

The additional tax-free allowance for families with one or two dependent children will gradually increase.

On the other hand, the marital quotient, which currently provides a tax advantage for households with a single professional income, will gradually be reduced from 2026 onwards. A longer transitional regime will apply to pensioners.

This measure has already generated considerable debate, as it progressively reduces a long-standing tax benefit for single-income households.

Copyright tax regime returns for software developers

Good news for the IT sector: the favourable copyright tax regime is being reintroduced for software developers, provided certain legal conditions are met.

The regime had previously been abolished following a ruling by the Constitutional Court and will once again apply to eligible income earned from 2026.

Stricter limits on benefits in kind

From the 2026 tax year, benefits in kind valued on a flat-rate basis—such as company cars or employer-provided housing—may represent no more than 20% of an employee’s total remuneration.

If this threshold is exceeded, tax penalties may apply.

Companies and business owners relying heavily on benefits in kind as part of their remuneration policy should therefore review their compensation structures.

Other important measures

The reform also introduces several additional changes, including:

• an increase in the minimum remuneration required to qualify for the reduced corporate income tax rate;
• new tax rules for doctoral scholarship recipients;
• the abolition of the tax increase for insufficient advance tax payments by self-employed individuals;
• the future introduction of a specific tax deduction for self-employed entrepreneurs;
• adjustments to several tax reductions relating to pensions, unemployment benefits and replacement income.

This reform affects company directors’ remuneration, salary policies, benefits in kind, the taxation of self-employed professionals and household taxation.

Some measures will take effect immediately, while others will be implemented gradually until 2030.

Your accountant can assess the practical impact of these changes on your personal or business situation and help you adapt your tax strategy to make the most of the new rules while remaining fully compliant.

Source: Belgian Personal Income Tax Reform Act of 9 July 2026 and Securex Lex4You analysis.