Key Core Takeaways
Corporate & Investment Tax Hikes
- VVPRbis Dividend Changes: The withholding tax rate on eligible dividend distributions will increase from 15% to 18% starting July 1, 2026. This pushes the total combined tax burden up to roughly 34.4% or 38.5%.
- Liquidation Reserves: For reserves established after December 31, 2025, and distributed after the holding period, the total tax burden rises from 15% to 18% due to an increased withholding tax rate.
- Capital Gains on Financial Assets: Operational implementation begins June 1, 2026, introducing an automatic 10% withholding tax at source by default via financial institutions.
- Securities Accounts Tax (TSA): An increase in taxes on securities accounts and insurance products will take effect around June 11, 2026.
Employment & Income Adjustments
- “Cent Index” Salary Cap: A temporary restriction on wage indexation will be introduced for employees making a gross monthly salary over EUR 4,000. Their indexation is capped at 2% per period, while salaries below the threshold retain full indexation.
- Copyright Income Restrictions: The flat-rate and lump-sum expense deductions for copyright income now strictly require a valid artwork certificate (kunstwerkattest) at the time of payment.
Social Security & Energy Policies
- Social Security (NSSO) Reductions: The target group reduction for first hires will expand to cover up to five employees (with the first capped at EUR 2,000/quarter). However, reductions for collective working time reductions and the four-day workweek are being abolished.
- Energy Excise Duties: Starting August 2026, excise duties will rise for natural gas and heating oil but decrease for electricity to encourage a transition away from fossil fuels.
