Prepayments: avoid up to 6.75% tax increase

By making advance payments on time, you can avoid a tax increase as a self-employed person or company. In this article we clearly explain why prepayment pays off, which deadlines you should keep an eye on and what this means concretely for your company. So you can start looking ahead smarter today.

Prepayments: not required, but recommended!

Corporations and independent contractors are not required to make prepayments on their taxes. But when they don't, they do face a tax increase.

The percentage of this tax increase depends on the evolution of interest rates. For income in 2026 (assessment year 2027), the increase is 6.75% for companies and 4.50% for the self-employed.

For example:

• You estimate your company's taxable profits by the end of fiscal year 2026 to be €100,000.
• The tax for a company is then €25,000 (€100,000 x 25%).
• If you make no prepayments, the tax increment is as much as €1,687.50 (€25,000 x 6.75%).

To reduce this tax increase, there may be prepayments be done. How great the benefit of prepayment is depends on the quarterly In which the payment was made.

For self-employed persons and corporations whose fiscal year runs concurrently with the calendar year, the following applies:

Making an initial prepayment by April 10, 2026 is thus the most interesting.

For companies with a different fiscal year the first three prepayments are due on the tenth day of the fourth, seventh and tenth months after the beginning of the fiscal year, and the fourth no later than the twentieth day of the closing month.

Does your company have insufficient cash To make an advance payment? Then you can use a loan enter into. The interest payable is tax-deductible in corporate income tax. This is in contrast to the increase due to insufficient prepayment, which is not a tax-deductible expense.

Exemptions

Newly formed companies (which qualify as small) and companies are during the first three years exempt of tax increment due to insufficient prepayments.

Establishing a liquidation reserve does not affect your tax increment.

Points of interest

It is also important to consider whether the company still qualifies as a ‘small business. If, for example, the minimum remuneration requirement for company directors, that can lead to additional taxes.

In this case, your profits will be taxed at 25% instead of possibly 20%. This also potentially impacts prepayments.

Bonification

In a sole proprietorship you get a bonus if you more prepaid than is necessary to avoid the multiplication due to insufficient prepayments.

The bonus works as a tax credit and depends on the quarter of deposit and base rate. Only excess prepayments are eligible for bonuses.

The bonification is calculated by multiplying this excess by the respective percentages in the table below. Starting self-employed are the first three years exempt of propagation, but may still receive a bonus.

Personal income tax reform announced for assessment year 2027

Currently, a bill before parliament to make profound changes to the prepayment system in personal income tax. These changes, once approved, would already impact from revenue 2026 (fiscal year 2027).

The following things would change:

• For profits, gains and income of the self-employed, the propagation due to insufficient prepayments falling away. So they would no longer have a penalty if they did not pay (enough) in advance.
• For all revenues in the personal income tax would be a 5th period of prepayment be entered from 21/12 of the income year through 20/02 of the following year. All payments during this period would be entitled to an additional bonus (1% for income 2026, assessment year 2027).

This announced reform has thus No impact on advance payments for corporations!

This measure has not yet been voted on and will not be debated in parliament until after the Easter vacations at the earliest (and thus after the due date of the 1st prepayment deadline).