European Union: Employee Benefits & Compensation

The Federal Tax Court has issued a landmark ruling on the tax treatment of earn-out payments linked to shareholder-managing directors' continued employment following a share sale. The decision establishes critical criteria for determining whether such payments should be taxed as employment income at rates up to 48% or as capital gains at approximately 28% under the partial income method.

Belgium's 2025-2029 pension reform introduces significant changes to early retirement eligibility and implements a new bonus-malus system designed to incentivize longer working careers. The reforms increase the minimum working days required for pensionable years from 104 to 156 FTE days and establish financial rewards for postponing retirement beyond statutory age while penalizing early retirement with insufficient career years.

The publication of Decree No. 2026‑341 of April 30, 2026 marks a decisive shift in the regulatory treatment of French so-called “Autres FIA” (or “other alternative investment funds”...