Belgian companies have parked operating cash in DRD SICAVs for two decades on one simple premise: the 30 % withholding tax on the fund's distributions came back in full. From assessment year 2026, it comes back only if the company pays its director enough.
Article 282/1 of the Belgian Income Tax Code makes the 30 % withholding tax on DRD SICAV dividends creditable and refundable only where at least one individual company director receives the minimum remuneration set by article 215, paragraph 3, 4° — EUR 45,000 for assessment year 2026, EUR 50,000 from assessment year 2027 and indexed thereafter, or the taxable result for the period if that is lower. Miss it and the withholding tax is a permanent cost. The restriction applies only where the DRD deduction is claimed, so waiving the deduction caps the loss at the ordinary corporate rate.
What a DRD SICAV does
Belgium's dividends-received deduction ordinarily requires a shareholding of at least 10 %, or an acquisition value of at least EUR 2,500,000, held for at least one year. A DRD SICAV is itself an investment company, and dividends it distributes escape both the minimum-shareholding and the holding-period tests.
The fund pays for that in constraints of its own: its articles must provide for the annual distribution of at least 90 % of net income, and it must invest in companies that satisfy the taxation condition. The corporate shareholder then exempts what it receives according to a DRD coefficient the fund reports each year. The attraction, in other words, was never a preferential rate — it was an exemption from conditions.
The Law of 18 December 2025 containing various tax provisions, published in the Belgian Official Gazette of 30 December 2025, leaves that architecture standing and adds two points of friction, both from assessment year 2026, which already covers balance sheets closed on 31 December 2025. Circular 2026/C/33 of 26 February 2026 comments on both.
A remuneration test borrowed from the reduced rate
The figure in article 282/1 is not a new one. The legislator reuses the threshold in article 215, paragraph 3, 4°, which already governs access to the reduced corporate rate of 20 % on the first EUR 100,000 of profit: EUR 45,000 gross to at least one individual director, granted during the taxable period in which the dividend is received. Where the company's taxable result falls below that figure, remuneration equal to the result is enough, so a company earning EUR 28,000 is not pushed into a loss to comply. The threshold becomes EUR 50,000 from assessment year 2027, indexed annually from then on.
Two groups sit outside the rule. Companies in their first four taxable periods since incorporation satisfy the condition automatically, and recognised cooperative companies keep the credit in all cases.
Nor does the measure stop at DRD SICAVs: regulated real estate companies, public pricafs, specialised real estate investment funds and ELTIFs fall within it too, along with their foreign equivalents.
The explanatory memorandum states the aim plainly: to stop directors from drawing their income exclusively through fund dividends rather than through remuneration subject to personal income tax. Since the threshold is the one in article 215, a company that failed it was already forgoing the reduced corporate rate. The withholding tax credit is simply the second thing it now forgoes.
The arithmetic on a EUR 10,000 dividend
Take a DRD SICAV distributing EUR 10,000 gross with a DRD coefficient of 98 %. Withholding tax of EUR 3,000 is deducted at source and the company banks EUR 7,000.
| Position | Taxable base | Withholding tax | Total tax cost |
|---|---|---|---|
| Threshold met, DRD claimed | EUR 200 | 3,000 credited, 2,950 refunded | EUR 50 (0.5 %) |
| Threshold missed, DRD claimed | EUR 200 | 3,000 permanently lost | EUR 3,050 (30.5 %) |
| Threshold missed, DRD waived | EUR 10,000 | 3,000 credited, 500 refunded | EUR 2,500 (25 %) |
The gap between the second and third rows is EUR 550 on EUR 10,000, or 5.5 % of the gross dividend. A EUR 2,000,000 portfolio distributing 3 % a year produces EUR 60,000 of dividends, so the same gap comes to EUR 3,300 per financial year.
The 5 % separate levy on exit
The second measure is narrower than its headline suggests. Article 219sexies subjects capital gains exempt under article 192, paragraph 1 to a separate levy of 5 % where they are realised on shares or units of investment companies benefiting from a tax regime that departs from the ordinary rules (article 203, paragraph 1, first sub-paragraph, 2°) or of regulated real estate companies (article 203, paragraph 1, first sub-paragraph, 2bis). Private pricafs are outside its scope.
The levy falls due only where income distributed by the vehicle qualified for the DRD regime in an earlier taxable period, and it constitutes a minimum taxable base, which means carried-forward losses cannot absorb it.
What blunts it in practice is the exclusion of gains arising from the repurchase by the investment company of its own units under article 186. Most DRD SICAVs are unlisted and open-ended, so an exiting shareholder has the fund buy back its units and cancel them, and the levy never engages. That leaves a sale to a third party, which is the exception rather than the rule.
Waiving the deduction to keep the credit
Questioned in parliamentary committee, the minister confirmed that the denial of credit under article 282/1 applies only where the DRD regime is claimed on the dividend. That turns the measure into a choice rather than a penalty.
Claim the deduction and the dividend leaves the taxable base almost entirely, but EUR 3,000 of withholding tax is gone: an effective burden of 30.5 %. Waive it and the dividend enters the ordinary taxable base at 25 %, while the withholding tax becomes creditable again and refundable for the excess. The ceiling drops from 30.5 % to 25 %.
Whether that holds in a given file depends on the DRD coefficient the fund reports, on whether carried-forward tax losses would absorb the dividend, and on the knock-on effect within the basket of deductions under article 207.
The choice between deduction and credit is made in the tax return, on figures that are known by then. The remuneration is not: it must have been granted during the taxable period and cannot be topped up after the accounts close. A company that spots the problem while preparing its return has only the second option left.
The DRD regime itself was tightened in parallel
Five months earlier, the Law of 18 July 2025 had already added a qualitative condition from the same assessment year 2026, aimed at direct shareholdings below 10 % whose acquisition value reaches EUR 2,500,000. Where the parent is not a small company, the shareholding must qualify as a financial fixed asset to support either the DRD deduction or the exemption of capital gains on shares.
Circular 2025/C/63 of 3 October 2025 sets out how the administration reads that. The link must be lasting, which rules out shares acquired with a view to short-term realisation, and specific, meaning it must reflect a strategic business relationship. A pure investment purpose, described by the administration as the mere realisation of capital gains or dividends, does not qualify. The explanatory memorandum had referred to shareholdings held "solely" for investment purposes, so the circular reads more strictly than the text it comments on, and that gap is likely to be litigated.
None of it reaches DRD SICAV dividends, which remain outside the shareholding and holding-period conditions. On that specific point the distance between the two routes has widened rather than closed, which is a large part of why the legislator turned to the fund itself.
What this changes for corporate treasury
Return and risk no longer settle the question of where a company's operating cash should sit. A third variable has entered the calculation, and it is decided elsewhere in the company for reasons that have nothing to do with investment: remuneration policy. A director who trims his own salary to manage his personal income tax moves the net return on the company's portfolio at the same time, without touching the portfolio.
Not every asset carries that link. A tangible movable asset on the balance sheet, a work of art for instance, produces no flow subject to withholding tax, so there is no credit to protect, and the 2026 capital gains tax does not reach it either, since that tax targets financial instruments. The price of the immunity is plain enough: no distributions, depreciation the tax authorities allow only exceptionally, and a value with no quoted price. The point is therefore not to swap one investment for another, but to avoid letting an entire balance sheet line depend on a single decision about pay.
Frequently asked questions
Is withholding tax on a DRD SICAV dividend still recoverable in 2026?
It is, provided the company grants at least one individual director the minimum remuneration set by article 215, paragraph 3, 4° of the Belgian Income Tax Code — EUR 45,000, or the taxable result for the period if that is lower. Without it, article 282/1 makes the 30 % withholding tax neither creditable nor refundable, and it becomes a permanent charge for the company.
What should a company do if it cannot meet the remuneration threshold?
The denial of credit applies only where the DRD deduction is actually claimed, as the minister confirmed in committee. A company that waives the deduction brings the dividend into its ordinary taxable base at 25 % but recovers the withholding tax, which reduces the cost from 30.5 % to 25 %.
Does the 5 % levy apply to every exit from a DRD SICAV?
No. Article 219sexies targets gains exempt under article 192, paragraph 1 realised on the units, but expressly excludes the repurchase by the investment company of its own units under article 186 — which is precisely how investors normally exit. In practice the levy is triggered only on a sale to a third party, and private pricafs remain outside its scope entirely.
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