A debit current account is a debt: the director has taken more out of the company than they put in or received, and the company now holds a claim against them. With no interest, or at a rate below the one the tax authorities set, that claim is treated as a benefit granted for free — and the director is taxed on it.
A director who owes money to their company without paying interest is taxed on a benefit in kind (art. 36, first paragraph, Belgian Income Tax Code, read with art. 18, §3 of the implementing decree). The reference rate is 5.57% for income year 2025, against 6.25% for 2024. On an average balance of €85,000, the taxable benefit is €4,734.50.
The mechanism is not new, but it returns at every year-end. In many small companies the balance builds up over the years: personal expenses paid by the company, withdrawals "pending the dividend", an advance for a private purchase. Every euro left unpaid becomes a euro on which the tax authorities compute interest that nobody paid.
What exactly is taxed
When a company places funds at its director's disposal interest-free or at a reduced rate, the gap between the reference interest and the interest actually paid is a benefit in kind. Its flat-rate valuation rests on article 36, first paragraph of the Belgian Income Tax Code, read with article 18, §3 of the implementing decree. The director is taxed on that amount as professional income, although no euro has reached their account.
The reference rate is set every year by royal decree. For a current account — a loan with no agreed term — the "no agreed term" category of the table applies, separate from the category for fixed-term loans.
Reference rates since 2022
For advances without an agreed term, the rate was 7.14% for 2022, 5.43% for 2023 and 6.25% for 2024. For income year 2025 it falls to 5.57%, under the royal decree of 8 February 2026 published in the Belgian Official Gazette on 17 February 2026.
To our knowledge the rate for income year 2026 has not been published yet: the decree comes early in the following year. The 2025 rates therefore serve as a provisional benchmark, to be confirmed once the new decree appears.
From average balance to tax: a worked example
The calculation base is the average debit balance. The reference method takes, month by month, the average of the balance on the first and on the last day. An administrative tolerance (Com.IR 36/87) allows a full-year approach when the balance has not fluctuated significantly: the average of the opening and closing balances is then used.
Take a balance of €80,000 on 1 January 2025 and €90,000 on 31 December. The average is €85,000. At 5.57%, the benefit is 85,000 × 5.57% = €4,734.50.
This €4,734.50 is added to the director's professional income. At a marginal rate of around 50%, before municipal surcharges, the extra tax comes to roughly €2,367 — on a benefit that brought no cash in.
Current account or fixed-term loan?
Formalising the advance as a fixed-term loan gives a repayment schedule, but no saving on the benefit in kind. For non-mortgage fixed-term loans, the 2025 table sets a monthly rate of 0.52% (0.26% for a car-purchase loan). Converted to an annual rate with the formula (1 + p)12 − 1, the former gives about 6.42%, higher than the 5.57% of the current account. The same gap existed for 2024: 6.80% against 6.25%.
The choice between the two therefore does not turn on the cost of the benefit, but on the legal certainty and repayment discipline a written agreement brings.
Neutralising or reducing the benefit
The benefit is the difference between the reference rate and the interest actually paid. Two levers follow: pay interest, or shrink the base.
A director who pays the company interest at least equal to the reference rate no longer generates a taxable benefit. Lowering the average balance — by repaying it or offsetting it with remuneration or a dividend — mechanically reduces the calculation base. Each option has its own tax cost and should be priced before it is chosen.
In both cases, a written agreement setting the rate, the due date and the repayment terms, approved by the board, makes the file easier to defend. The Belgian Companies and Associations Code rules on conflicts of interest apply to a transaction between the company and its director; the company's legal adviser should validate them.
What a current account does not solve
An advance is not a cash exit. It has to be repaid, the company remains the creditor, and a balance that never shrinks signals a permanent personal liquidity need. For that need the real levers lie elsewhere: remuneration, dividend, liquidation reserve, wealth structuring — each with its own cost, to be compared with figures in hand rather than letting the balance grow by default.
Frequently asked questions
What is a director's debit current account and why is it taxed?
It is the balance a director owes to their company after withdrawing more than they contributed or received. If they pay no interest, or less than the reference rate, the difference is taxed in their hands as a benefit in kind (art. 36, first paragraph of the Belgian Income Tax Code, read with art. 18, §3 of its implementing decree).
What is the benefit-in-kind rate for 2025 and 2026?
For income year 2025 the reference rate for advances without an agreed term is 5.57%, against 6.25% for 2024 (royal decree of 8 February 2026, published in the Belgian Official Gazette on 17 February 2026). To our knowledge the 2026 rate has not been published yet; check it as soon as the decree appears.
How can this benefit be avoided or reduced?
The director can pay the company interest at least equal to the reference rate, which removes the benefit. They can also lower the average balance by repaying or offsetting it, after comparing the tax cost of each solution.
The first meeting is meant to price your actual balance and compare the exit options before the financial year closes — not to sell a structure.