Management Company: Planned Reform?

The new Federal Government is considering a significant reform of “management companies”, structures frequently used by certain self-employed workers or company directors to benefit from the reduced corporate tax rate (20%) instead of personal income tax (50%).

Main changes expected:

• The minimum salary the company director must pay themselves to access the reduced rate will increase from €45,000 to €50,000 as of 2026.
• Benefits in kind (BIK) and artificially structured income through the company will be limited: a maximum of 20% of total remuneration may consist of benefits.
• The liquidation reserve regime will be modified: the waiting period will decrease from 5 to 3 years, and the withholding tax will rise from 5% to 6.5%.

Objectives:

• Curb the use of structures aimed mainly at tax optimisation of personal income.
• Restore tax fairness and strengthen public revenue.

Implications for company directors and SMEs:

• A management company will need to operate as a genuine business, and the director must receive a decent, market-based salary.
• An excessive portion of the salary in lump-sum benefits or a symbolic salary will jeopardize access to the favorable regime.
• For tax advisors, increased vigilance will be required: social and tax structuring must align with the new rules.