Reform Of Personal Income Tax Counters Disproportionate Lump‑sum Benefits

The law of 17 December 2025 on the reform of personal income tax introduces a measure aimed at countering the disproportionate granting of lump-sum benefits in kind (BIK). If the employees receive disproportionate lump-sum BIK, the employer will need to pay a specific contribution of 7.5% on that disproportionate part of the lump-sum BIK. This contribution is not tax-deductible and is considered a disallowed expense.

Why this measure was introduced

The government aims to prevent excessive use of granting lump-sum BIK as a form of alternative remuneration. Granting lump-sum BIK is more tax efficient as the taxable value of lump-sum BIK is, in principle, lower than the actual value.

The main goal of the government is to increase revenue from social security contributions and taxes by encouraging employers to pay their employees more cash salary.

Specific contribution of 7.5%: If an employer grants lump-sum BIK to employees which are more than 20% of their total remuneration, the excessive portion (everything above this 20%) is subject to a specific contribution of 7.5%. This contribution is borne by the employer and is not tax-deductible.

Lump-sum BIK: Some commonly used lump-sum BIK for employees falling under the scope of this rule are:

• Company car: The BIK for a company car varies significantly depending on the catalog value, the registration date, the kind of fuel and the CO₂ emissions;
• IT equipment: There is a lump-sum BIK for equipment made available free of charge for private use: laptop, internet, telephone subscription, mobile phone, etc;
• Stock options taxed at grant on a lump‑sum basis under the Stock Option Law of 26 March 1999.

Other BIK that fall under the scope of this rule but that are less common for employees:

• Free use of real estate or parts of real estate;
• Benefit on an interest‑free loan or a loan at a reduced interest rate.

Out-of-scope remuneration components

Firstly, it is important to note that not all BIK fall under the scope of this new rule. BIK taxed at their actual value, such as warrants or free shares, are indeed excluded.

Secondly, tax exempt social benefits (such as hospitalisation insurance, reimbursements of commuting expenses by public transport or bike allowances) also remain out of scope.

Calculation: To calculate the 20% threshold, the total taxable remuneration (meaning after the deduction of social security contributions and including BIK) for all employees is multiplied by 20%. In practice, this will be based on the totals reported on the 281.10 tax forms.

If the total amount of lump-sum BIK is more than the 20% threshold, the excessive portion (everything above this 20%) is subject to the specific contribution of 7.5%.

Example – A company with two employees

In the example below, because the calculation is performed at the level of all employees combined, the overall ratio remains below 20%, even though the threshold is exceeded for Roland. Therefore, no specific contribution of 7.5% is due by the employer.

*The above amounts are stated after deduction of social security contributions.

Key takeaways

• There is no direct impact on the employees if the 20% threshold is exceeded;
• Warrants fall outside the scope of the new regulation, reducing the likelihood of an employer exceeding the 20% threshold.

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.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.