Stricter conditions for the DRD from 2026

2. Holding period condition

The participation must have been held in full ownership for at least one uninterrupted year.

3. Taxation condition

The distributing company must be subject to a tax regime comparable to Belgian corporate tax.

Link with the exemption of capital gains on shares

The same three conditions also apply to the exemption of realised or accrued capital gains on shares in corporate tax.

What will change under the draft Programme Law from assessment year 2026?

The tax measures of the draft Programme Law have now been approved by the federal government.

The participation condition of at least 10% remains unchanged. However, for companies that hold less than 10%, but meet the alternative condition of an acquisition value of at least €2.5 million, an additional requirement applies. If the company is not a small company, the participation must qualify as a financial fixed asset in order to be eligible for the DRD deduction.

Important: This qualification is assessed at the time the dividend is allocated or made payable.

In practice: If a large parent company holds less than 10% of the capital but its participation exceeds €2.5 million in acquisition value, it will need to demonstrate a lasting economic link with its subsidiary in order to continue benefiting from the DRD deduction.

Entry into force

The new rule applies from assessment year 2026 (for financial years starting on or after 1 January 2025). It may therefore be important to take this into account when planning corporate tax prepayments.

Need assistance with the DRD deduction or corporate tax?

Our tax experts closely monitor all legislative changes. We are happy to assist you with:

• Reviewing your participation structure

• Accounting qualification of participations

• Corporate tax and prepayments