End-of-year tips 2025: personal income tax

Pension savings allow you to build up a supplementary pension on top of your statutory pension. Under certain conditions, this provides a tax deduction in your personal income tax return. There are two possibilities:

• You contribute up to EUR 1,050.00. This entitles you to a tax reduction of 30% of the premium paid (maximum EUR 315.00).
• You contribute a higher amount, up to a maximum of EUR 1,350.00. In this case, you receive a tax reduction of 25% on the total amount deposited (maximum EUR 337,50).

Keep in mind that these amounts are maximum amounts. You can also contribute lower amounts. However, if you contribute more, any amount exceeding these limits will not qualify for tax reduction.

Federal long-term savings for life insurance products (branch 21 or branch 23) entitles you to a 30% tax reduction on a maximum amount of EUR 2,530.00 per taxpayer. This gives you a tax benefit of up to EUR 759.00.

Did you make a donation of at least EUR 40.00 to a recognized institution in 2025? If so, you are eligible for a 30% tax deduction. Please note that a draft bill introduced last summer proposes reducing the tax deduction from 45% to 30% retroactively effective from 1 January 2025. However, this legislation has not been voted on. If not voted on by the end of the year, the 45% rate will continue to apply for tax year 2026.

In principle, donations must be made in cash. However, in specific cases, donations in kind or in the form of works of art also entitle you to a tax deduction. The absolute maximum amount of donations eligible for a tax deduction is EUR 420,930.00 or 10% of your total net income.

As a self-employed person, you can build an additional statutory pension in the second pension pillar through the free voluntary supplementary pension for the self-employed (known as VAPZ in Dutch PPCI in French). These contributions are deductible from your professional income as social security contributions, meaning they are fully deductible.

• As a self-employed person, you can take out an ordinary voluntary supplementary pension, with a maximum premium of 8.17% of net taxable income and an absolute maximum of EUR 4,004.44.
• You can also opt for a social pension agreement, with a maximum contribution of 9.40% of net taxable income and an absolute maximum of EUR 4,602.71.
• In addition, you can build up an additional pension in the second pension pillar through the pension agreement for the self-employed. This is designed for self-employed individuals without a company (sole traders). This offers a 30% tax reduction on the paid contributions (although within the 80% limit).

This allows self-employed individuals to fully leverage tax benefits while strengthening their pension savings for the future.

When you invest in new shares of start-up companies, you can benefit from a tax reduction. This is 30% (of the invested amount for a small company) and 45% for a micro company.

For investments in growth companies (scale-ups), you are entitled to a tax reduction of 25% of the invested amount.

Please note that the total investment amount eligible for these tax benefits is a maximum of EUR 100,000.00 per taxable period and per taxpayer. This limit applies to both the start-up and scale-up tax shelter.

When you subscribe to shares of recognized development funds, you benefit from a tax reduction of 5% of the actual expenses incurred during the taxable period. This is subject to a minimum investment of EUR 420.00. Development funds provide financial resources in the form of loans to microfinance institutions in developing countries.

The maximum tax reduction is EUR 350.00, which means you can invest a maximum of EUR 7,000.00.

As a resident of the Flemish Region, you can invest up to EUR 75,000.00 in a Flemish SME (owned by friends or family) through the friends share (also known as winwin capital). This means that you contribute money to obtain new shares in the company. In return, you receive an annual tax credit of 2.50% on the invested amount, for a period of up to 5 years.

You may combine the friends share with the Flemish winwin loan (see below), provided that the total investment does not exceed EUR 75,000.00.

As a resident of the Flemish Region, you lend money to an SME established in Flanders through the winwin loan, up to an amount of EUR 75,000.00 (this is the combined maximum for both the winwin loan and winwin capital combined).

As a lender, you will receive an annual tax credit of 2.50% on the outstanding capital of the winwin loan (on 31 December). In addition, you may also be eligible for a one-time tax credit of 30% (or 40% for contracts concluded between 15 March 2020 and 31 December 2021) when any (portion of) the winwin loan is not repaid.

As a resident of the Brussels-Capital Region, you can grant a proxy loan to an SME established in the Brussels-Capital Region. This entitles you to an annual tax credit of 4% for the first three years and 2.5% for the remaining term of the loan. The loan can have a term of 5 or 8 years. The tax credit is calculated on the average annual balance of outstanding loans.

Investment limits are:

• EUR 50,000.00 per proxy loan per year
• EUR 200,000.00 in total for all proxy loans combined

In addition, you are eligible for a one-time 30% tax credit on the permanently lost loan amount if the borrower fails to repay the loan.

If you do not make sufficient payments for your personal income tax, the tax authorities will apply a tax increase. For 2025, this increment is 6.75%.

Do you expect to owe taxes on your earnings/profits for income year 2025? If so, we recommend making sufficient advance payments.

Advance payments for income year 2025 (tax year 2026) can only be made until 22 December 2025. It is important to estimate your taxable income for 2025 as accurately as possible. Doing so, you avoid (or at least limit the impact of) a 6.75% tax increase.

The investment deduction is designed to encourage businesses and companies to invest in new assets. The investment deduction was reformed for investments from 1 January 2025, for all businesses, including sole proprietors.

The federal coalition agreement mentioned some other smaller changes that would take effect retroactively from 1 January 2025. However, no legislation has been drafted yet. For more details on the latest legislative changes on this topic, please refer to our year-end corporate tax tips and our previous article in this regard: New investment deduction: investment lists published at the last minute.