Company directors: should you increase your remuneration to €51,000?
Your company benefits from the reduced corporate income tax rate, or would like to benefit from it. Since 2026, the director remuneration requirement has increased from €45,000 to €51,000 gross, and this threshold is now indexed each year. Does that mean you should automatically increase your remuneration? The answer comes down to a calculation, and the result is often counter-intuitive. In several cases, the additional remuneration costs more than the tax benefit it is intended to preserve. In others, there is no need to increase the remuneration at all.
What the reduced rate is worth, and what it requires
The reduced rate allows a small company, within the meaning of Article 1:24 of the Belgian Code of Companies and Associations, to be taxed at 20% on the first €100,000 of taxable profit instead of 25%. The maximum tax saving is therefore €5,000 per financial year. However, that full benefit is only achieved where taxable profit exceeds €100,000. Below that level, the benefit is limited to 5% of taxable profit. Access to the reduced rate is subject to several cumulative conditions under Article 215 of the Belgian Income Tax Code 1992. These include qualifying as a small company, having a shareholding predominantly held by individuals, not being a financial company and, importantly, paying sufficient remuneration to a director. At least one director must receive annual gross remuneration that reaches the statutory threshold. The threshold, based on a statutory amount of €25,000, is now indexed every year. After indexation, it amounts to €51,000 for financial year 2026. The remuneration paid to several directors cannot be added together for this purpose: the threshold must be reached by one director individually.
Three situations where the question does not even arise
Before considering any increase, it is important to determine whether you actually need to reach the threshold. There are three situations in which this is not required. First, there is the alternative rule under Article 215. Where the company's taxable result is lower than the threshold, it is sufficient for the director's remuneration to be at least equal to that taxable result. In practice, the minimum remuneration then corresponds to half of the sum of the taxable profit and the remuneration. A company with relatively low profits can therefore continue to benefit from the reduced rate with remuneration well below €51,000. Second, newly established companies are exempt from the remuneration requirement during their first four financial years. Finally, for a company incorporated during the course of a financial year, the threshold is prorated according to the number of months of activity. A company incorporated on 1 July, for example, only needs to reach half of the annual threshold.
An indexed threshold: annual monitoring has become essential
The change is not limited to the increase in the threshold itself. The threshold is now indexed annually. The applicable amount will therefore change each year in line with the consumer price index. This has a very practical consequence. A remuneration amount fixed at the beginning of the year based on the previous year's threshold may, purely because of indexation, fall below the new threshold and cause the company to lose the reduced tax rate for the sake of only a few hundred euros. It is therefore no longer sufficient to determine a theoretical remuneration amount once and leave it unchanged. Each year, the applicable indexed threshold and the remuneration actually granted must be monitored.
The 20% cap on benefits in kind, and its blind spot
An additional condition has been introduced. Flat-rate benefits in kind, such as a company car, housing, a telephone or a computer, may no longer represent more than 20% of the director's remuneration. On remuneration of €51,000, this corresponds to a maximum of €10,200. The remainder must consist of actual remuneration. According to initial comments, this ratio may be assessed globally at company level and by category of beneficiaries rather than director by director. This could mean that a director who receives most of their remuneration in cash could compensate for another director whose remuneration package contains a high proportion of benefits in kind. The precise application of this rule will, however, need to be confirmed on the basis of the text published in the Belgian Official Gazette. One particular point is worth noting because it reveals a blind spot in the system. For a director, the only consequence of exceeding the limit is the loss of the reduced corporate tax rate. There is no separate 7.5% corporate tax assessment on the excessive portion, unlike the rule applicable to employees. This creates a paradox: once a company gives up the reduced rate, the 20% limit is no longer accompanied by any specific sanction for its directors.
The decision in figures
Where an increase is actually required, the key issue is comparing the corporate tax saving with the director's personal cost of the additional remuneration. Between personal income tax at the marginal rate and social security contributions, that personal cost is approximately 55% of the additional amount. Three examples illustrate the decision.
THREE CASES, WITH EXPLICIT ASSUMPTIONS
Case A: high profit
Taxable result of €130,000 after remuneration, with the director currently receiving €45,000. An additional €6,000 is required to reach €51,000. Benefit: the full reduced-rate advantage, or €5,000. Cost of the additional remuneration: approximately €3,300. Net benefit: approximately €1,700. The increase is worthwhile.
Case B: low profit
Taxable result of €35,000, with the director already receiving €40,000. The alternative rule applies. As the remuneration exceeds the taxable result, the company qualifies for the reduced rate without having to reach €51,000. No increase is required.
Case C: intermediate profit
Taxable result of €60,000, with the director receiving €45,000. An additional €6,000 is required. However, the tax benefit is limited to 5% of €60,000, or €3,000, while the cost of the additional remuneration is approximately €3,300. The result is a net loss of around €300.
€51,000 is not a target in itself
The lesson from these three cases is straightforward: do not aim for €51,000 automatically. The higher the company's profit, the more likely an increase in remuneration is to be worthwhile. The lower the profit, the greater the risk that the increase will cost more than it saves. Giving up the reduced rate and accepting the standard 25% corporate tax rate can sometimes be the more efficient decision. Of course, there may be other reasons unrelated to the reduced corporate tax rate for paying higher remuneration. These may include building up additional pension rights, increasing borrowing capacity or simply covering personal financial needs. But the reduced rate alone should not dictate the decision.
THE DECISION TO PREPARE
Before closing the financial year, proceed in the right order. First, check whether you are actually required to reach the threshold, taking into account the alternative rule and any exemption applicable during the company's first financial years. Next, verify the indexed threshold applicable to the financial year so that the company does not lose the reduced rate simply because an indexation adjustment was overlooked. Then assess the proportion of benefits in kind in the director's total remuneration. Only after these checks should you calculate the actual cost of increasing remuneration and compare it with the potential tax benefit, which only reaches €5,000 where taxable profit exceeds €100,000. The objective is not to reach the threshold at all costs, but to make an informed decision.
In 30 seconds
✅ Reduced corporate tax rate: 20% instead of 25% on the first €100,000 of taxable profit, representing a maximum saving of €5,000
✅ The saving only reaches €5,000 where taxable profit exceeds €100,000; below that level, it is limited to 5% of taxable profit
✅ Requirement: at least one director must receive €51,000 gross remuneration for financial year 2026, based on a €25,000 statutory amount indexed annually
✅ Alternative rule: if the taxable result is lower, remuneration equal to that result is sufficient
✅ Flat-rate benefits in kind are capped at 20% of remuneration; for directors, the only sanction is the loss of the reduced rate
✅ Increasing remuneration is only worthwhile where profit is sufficiently high and the shortfall to be covered is limited: the calculation should determine the decision