The Belgian government has approved the tax measures outlined in last month’s budget agreement.
This includes an increase in VAT on a series of products in 2026, Finance Minister Jan Jambon confirms on Wednesday.
Starting from March 2026, VAT on sports, culture, and leisure activities will rise from 6% to 12%, apart from certain exemptions remaining in place.
The same VAT increase will apply to overnight stays in hotels and camp sites, as well as takeaway meals and drinks.
VAT on non-alcoholic beverages in the hospitality sector will drop from 12% to 6%.
Fourth highest debt-to-GDP ratio in the EU
Belgium’s debt has increased by €32 billion this year according to the country's debt agency's latest report in November. The total federal debt stands at €551 billion - 106.8% of its gross domestic product (GDP).
Belgium has the fourth highest debt-to-GDP ratio in the EU. Only Greece (152.5%), Italy (137.9%), and France (114.1%) have higher public debt levels.
The government is aiming to save €9.2 billion over its mandated period to meet budget targets and reduce its budgetary deficits. The initial proposed tax measures aim to contribute to this effort.
Energy taxation will also be restructured, with gradual increases in excise duties on natural gas and heating oil, while excise duties on electricity will be reduced.
Consumption is not the only target of higher taxes. The banking tax and the tax on security accounts will be raised — from 0.15% to 0.3% — alongside an increase in insurance taxes from 9.25% to 9.6%, effective from 1 April.
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More measures introduced
The flat-rate deduction for copyright-related expenses will be abolished starting 1 January, except for those with a regular or “enhanced” arts work certificate.
The prescription period for inactive accounts will be reduced from 30 years to 5 or 10 years depending on specific circumstances. These include accounts with no transactions or where the account holder has not contacted the bank for five years.
This measure, initially announced in late November, has already triggered an influx of enquiries to the federal tax administration.
Management companies are also affected by the new measures. The dividend tax rate for “VVPRbis” distributions concerning small businesses will increase from 15% to 18%.
“With this tough package of measures, the government is taking a significant step toward greater fiscal discipline and financial stability, ” Jambon said.
“These decisions are critical to restoring the country’s finances and enhancing the credibility of our fiscal policy, which is essential in the current unstable economic and international context. This is ultimately in the best interest of both current and future generations.”
For liquidation reserves formed after 31 December 2025, the withholding tax rate will rise from 6.5% to 9.8%, resulting in an effective total taxation rate of 18%.
Additional measures will be implemented in 2027. These include an increase in the air passenger tax from €5 to €10, a freeze on current payroll subsidies for companies at 2025 levels, and higher excise duties on petrol and diesel, which are expected to generate €50 million annually.
Despite lengthy negotiations that delayed the budget approval process and necessitated provisional twelfths rolled over from the previous budget on a monthly basis for the first quarter of the year, the agreement was finalised just before Christmas.
