The bill of 17 December 2025 will introduce two key measures targeting low director remunerations and the excessive use of lump‑sum benefits in kind (BIK), by tightening access to the reduced 20% corporate income tax rate on the first EUR 100,000 of taxable profit (standard rate: 25%). These measures affect only small companies, as they are the only ones eligible for the reduced 20% corporate income tax rate (reduced rate).

A small company will lose access to the reduced rate if:

  • no director will receive remuneration of at least EUR 50,000 (subject to indexation), or
  • lump‑sum BIK will exceed 20% of the director’s total remuneration.

Changes in conditions for the reduced rate  

  1. Increase of the threshold

    One of the current conditions to apply the reduced rate is that the remuneration of at least one director must be minimum EUR 45,000. The new bill will raise this minimum remuneration to EUR 50,000 (subject to indexation). The minimum remuneration includes BIK. This condition is not applicable in the first 4 taxable periods of a small company.

    This measure should encourage small companies to pay more remuneration to one of their directors, which is subject to social security contributions for the self‑employed and progressive personal income tax rates, rather than subjecting the company’s profits to corporate income tax and distributing the net profit as dividends (which may be more beneficial for the director).

    A director receiving EUR 35,000 remuneration + EUR 10,000 lump‑sum BIK (total: EUR 45,000) currently meets the condition. Under the draft law, this will no longer suffice; an additional EUR 5,000 is needed to reach the EUR 50,000 threshold.

  2. A new condition

    Besides the increase in minimum remuneration, an additional condition will be introduced in order to qualify for the reduced rate: lump-sum BIK cannot exceed 20% of the directors’ total remuneration. Lump-sum BIK are a commonly used form of alternative remuneration because the lump-sum taxable value is in principle lower than the actual value. With this new condition, the government wants to prevent excessive use of the lump-sum BIK.

Lump-sum BIK

Typical lump‑sum BIK include:

  • Company car (amount depends on catalogue value, registration date, fuel type and CO₂ emissions);
  • IT equipment (laptop, mobile phone, internet, phone subscription, etc.);
  • Free housing (indexed cadastral income × 100/60 × 2);
  • Heating/electricity (EUR 2,560 and EUR 1,280 respectively for 2026).

Other BIK such as interest‑free loans, household staff, etc. are also included.

Calculation method

The ratio will be calculated at the level of all directors combined (not individually).
The 20% threshold will be based on total remuneration including BIK. In practice, this will be based on the totals reported on the 281.20 tax forms.   

If the total amount of lump‑sum BIK exceeds the threshold, the small company loses the reduced rate.

Example:
  Company director    
  Remuneration   50,000.00  
  Laptop, mobile, internet (lump-sum BIK)   216.00  
  Company car (lump-sum BIK)   7,000.00  
  Free housing (lump-sum BIK)   10,000.00  
  Total income   67,216.00  
  Threshold lump-sum BIK (20%)   13,443.20  
  Total lump-sum BIK   17,216.00  
  Ratio of lump-sum BIK to total income   25.61%  

 

Since the 20% threshold is exceeded, the company loses access to the reduced rate.
Maximum impact: EUR 5,000 per year ((25% – 20%) × EUR 100,000).

Points of attention

  • In some cases, paying a lower remuneration (e.g., EUR 20,000) and opting for dividends may still be more tax‑efficient.
  • The EUR 50,000 minimum remuneration requirement does not apply in the first four taxable periods, but the 20% BIK threshold applies from year one.
  • The government also plans to increase the reduced withholding tax rate on dividends from 15% to 18%, which may influence remuneration/dividend planning.

Conclusion

Whether it is worthwhile to increase remuneration to EUR 50,000 and limit lump‑sum BIK to 20% depends on the director’s specific situation. A case‑by‑case analysis remains essential.

A cautionary note
Readers are cautioned against making any decisions based on this material alone. For specific legal advice and further guidance on this topic, please reach out to one of the lawyers linked below or to your trusted adviser at Loyens & Loeff.