Benefit in kind on interest-free loans to decrease in 2025: what does this mean for you?
March 2026 - Employers who grant an employee or company director an interest-free loan or a loan at a reduced interest rate thereby grant a taxable benefit in kind (VAA). The reference interest rates for 2025 have fallen. In concrete terms, this means that the taxable benefit, and therefore also the tax, will be lower than in 2024.
The new percentages were published in the Belgian Official Gazette on February 17, 2026, and apply to benefits granted from January 1, 2025.
A quick refresher: how is the VAA calculated?
When you, as an employer, grant a low-interest or interest-free loan, the tax authorities look at the difference between:
- the annual reference interest rate (set per type of loan), and
- the interest rate that is actually charged.
This difference constitutes the taxable benefit in kind. The lower the reference interest rate, the smaller the taxable benefit. The new interest rates also apply when a company director withdraws funds from his company via the cash register or current account.
Mortgage loans: decrease to 3%
For mortgage loans granted from January 1, 2025, the reference interest rate will be 3% (2024: 3.28%). This may seem like a small decrease, but for larger amounts, it can make a noticeable difference in the taxable benefit. For mortgage loans with a variable interest rate (granted from January 1, 1995), the benefit is calculated on the basis of the reference indices published monthly in the Belgian Official Gazette. The reference indices for 2025 are included as an appendix to the Royal Decree of February 8, 2026.
Non-mortgage loans with a fixed term
The following monthly expense percentages apply to loans with a fixed term:
- car financing: 0.26% (2024: 0.28%)
- other loans: 0.52% (2024: 0.55%)
Here too, you can see a slight but structural decline.
Non-mortgage loans without a fixed term
For loans without a fixed term, the reference interest rate is 5.57% (2024: 6.25%). This is a more significant decrease than for the other categories. This can have a considerable impact on the taxable benefit, particularly in the case of current account relationships.
What does this mean for you in concrete terms?
The lower reference interest rates mean that:
- employees and company directors will be taxed less on their benefits in kind
- the withholding tax due may be lower
- the tax cost of internal financing through the company will be slightly lower.
For employers and accountants, it is important that the correct VAA for the 2025 income year is correctly included on the tax forms and in the summary statements. As a company director, do you have a current account position or are you considering an internal loan through your company? Then it is worth looking at what these new percentages mean in concrete terms for your tax situation in 2025.
