Increase in withholding tax on distribution of reserves: what does this mean for you?

On November 24, 2025, an agreement was reached within the De Wever government on additional budgetary measures to improve the fiscal situation. This included the unexpected announcement of an increase in the withholding tax on VVPRbis reserves and liquidation reserves.

Exactly when these increases will take effect is not immediately clear. Our sources indicate that there will almost certainly be a grandfathering principle for liquidation reserves accumulated until 30/12/2025. For VVPRbis, the effective date depends on publication in the Belgian Official Gazette. Everything indicates that this will not be in 2025.

What was decided?

The government has decided to reduce the withholding tax rate on profit distributions by small companies (VVPR-bis) to increase from 15% to 18%. The three-year waiting period to benefit from the reduced rate remains.

Also at liquidation reserves increases withholding tax on benefits, so the total tax burden on 18% comes. Important: distributions of liquidation reserves upon liquidation remain exempt from withholding tax.

Also read: Early distribution of liquidation reserves: interesting or not?

When do these increases go into effect?

Reliable sources indicate that, although the legislation not yet final is, the following is suggested:

• There may be a ‘grandfathering’ principle for liquidation reserves constructed until 30/12/2025. For these accumulated liquidation reserves, the old regulation applicable (5% after 5 years or 6.5% after 3 years + ‘first in, first out’ application).
• VVPRbis may not receive a grandfathering regime. From effective date, all distributions under this regime will be at the rate of 18%. The effective date will depend on the publication of the amendment in the Belgian Official Gazette (1st day of the month following the month in which the law is published in the Belgian Official Gazette). It is, according to our information highly unlikely to happen as late as 2025.
• Companies that are still trying to quickly get their closing date of the fiscal year change (so as to still fall under the old tax regime), will presumably be whistled back by the introduction of a anti-abuse provision.

Why is this important?

Since the liquidation reserves accrued through 30/12/25 may still fall under the old scheme, there is no immediate action necessary.

For business owners who have the VVPRbis system apply, it may be interesting to reserves to be distributed as late as this year or early 2026. That way you can lock in the current, lower withholding tax rate and potentially avoid additional fees.

To pay out now or not? Some considerations:

Capital gains tax

It is appropriate to consider the impact on company value at 31/12/2025. Indeed, this date constitutes the reference point for the future calculation of the capital gains tax. Not paying a dividend at that time keeps the value of your company higher (cash position).

This consideration is particularly relevant for companies that will eventually possibly sold become. For companies not intended for sale, such as management companies, the reference date of 31/12/2025 is obviously of less importance for capital gains tax purposes.

Other considerations

• Have you insufficient cash To pay the withholding tax? Then distributing is usually not financially interesting.
• Large distributions before the end of the year can impact the deductibility of interest on credit current account.
• With each benefit, the necessary reporting required (AV, BO, dual benefit tests). The cost of this should outweigh the benefit of 3% saved withholding tax.