Key takeaways
- Three cumulative conditions make an expense deductible: linked to the activity, incurred during the taxable period and supported by documentation (Art. 49 ITC 1992).
- Business meals are 69% deductible (Art. 66bis ITC 1992); reception costs, catering and business gifts 50%.
- In 2026, combustion-engine cars ordered from 1 January are no longer deductible; electric ones stay at 100% if ordered before the end of 2026.
- An SRL that meets the conditions can benefit from a CIT rate of 20% on the first €100,000 of profit, versus 25% at the standard rate.
Every SRL director sooner or later asks the same question: which expense can be booked as a cost, and which one risks being rejected during an audit? Deductible expenses for an SRL are governed by the 1992 Income Tax Code (ITC 1992), which sets general conditions valid for every category and specific rates for certain sensitive items. Understanding these rules avoids both under-deduction (an inflated taxable base) and tax adjustment (poorly justified costs).
This article reviews the rules applicable in 2026: the general conditions of deductibility, the rates for meals and receptions, the new company car regime, and the main everyday items. A final point on the reduced CIT rate measures the concrete impact of each euro of allowable cost.
The three conditions for a deductible expense
Article 49 of the ITC 1992 is the gateway to any expense deduction for a Belgian company. It sets three cumulative conditions.
First condition: the expense must be linked to the professional activity. The connection between the spending and the SRL's corporate purpose must be demonstrable. A lunch with a prospect is. A family meal held outside any professional context is not. The connection need not be direct, but it must exist and be justifiable by the nature of the activity.
Second condition: the expense must have been incurred during the taxable period. An invoice relating to a previous accounting year cannot be deducted from the current year's result. The date of the supporting document must match the declared period.
Third condition: the expense must be supported by valid documentation. An original invoice, a till receipt, an internal expense note: any dated and signed document will do, provided it identifies the supplier, the nature of the expense and its amount. For meal expenses, an additional document mentioning the name of the contact and the purpose of the meeting strengthens the proof of the professional character.
These three conditions apply to every category of expense. The deductibility rates that follow are layered on top: even an expense theoretically 100% deductible will be rejected if it does not meet these basic conditions.
Business meals and reception costs
Spending linked to professional meals and events is not 100% deductible. The ITC 1992 distinguishes two categories with different ceilings.
business meals deductible
Art. 66bis ITC 1992
reception costs and gifts
applicable legal limit
A business meal taken at a restaurant with a client, a supplier or a prospect is 69% deductible at company level (Art. 66bis ITC 1992). The VAT on this type of expense is never deductible, even for a company subject to VAT. The non-deductible fraction (31%) constitutes a non-deductible expense (NDE) that is added to the CIT taxable base. For both categories, the amount to take into account when calculating the deduction is understood VAT included, since that VAT cannot be recovered.
Reception costs, catering, venue hire for company events and business gifts are limited to 50%. This rate also applies to meals organised internally (a seminar with catering, a team meeting with a catered meal) without any client or supplier present.
Company car costs in 2026
The deductibility of company vehicles was the subject of a structural reform with the Act of 25 November 2021 on the fiscal and social greening of mobility. In 2026, the phase-out schedule for combustion engines produces its most visible effects.
| Combustion (before 1/1/2026) | Combustion (from 1/1/2026) | Electric (before 31/12/2026) | |
|---|---|---|---|
| Fiscal deductibility 2026 | 50% | 0% | 100% |
| Fiscal deductibility 2027 | 25% | 0% | 95% |
| Fiscal deductibility 2028 | 0% | 0% | 90% |
| Recoverable VAT (mixed use) | 50% max | 50% max | 50% max |
A combustion-engine vehicle ordered before 1 January 2026 benefits from a transitional regime: 50% deductibility in 2026, then 25% in 2027 and 0% from 2028. A combustion-engine vehicle ordered from 1 January 2026 no longer opens any right to fiscal deduction at company level.
Fully electric cars ordered before 31 December 2026 remain entirely deductible at 100%. From 2027, this rate will start to decrease gradually (95% in 2027, 90% in 2028). An order placed before the end of 2026 therefore secures maximum deductibility for the entire fiscal life of the vehicle.
The VAT on vehicles used for mixed purposes (professional and private) remains capped at 50%, regardless of the engine type.
Office, telephone and everyday expenses
Several everyday items are 100% deductible provided the three conditions of Art. 49 ITC 1992 are met. These are the most common expenses in the life of an SRL, and the ones most often poorly documented.
Main everyday expenses deductible at 100%
Computer hardware and software
Depreciated over the normal useful life, or as a one-off deduction if the amount is not significant.
Professional subscriptions and training
Software licences, subscriptions to business tools, training costs of the director or staff.
Business travel
Public transport, taxis and train tickets for client meetings, excluding the company car subject to the specific rules above.
Telephone and internet connection
Professional share of the bill, estimated and documented by a reasoned internal note.
Home office
Share calculated in proportion to the surface dedicated to the activity relative to the total floor area of the home.
Professional insurance
Professional civil liability, legal protection and insurance specific to the company's activity.
For telephone and internet, the deductible proportion corresponds to the actual professional use. A director who uses their mobile subscription 80% for their activity deducts 80% of the bill. There is no need to log every call: a documented and reasonable estimate is enough, verifiable in the event of an audit.
The home office follows the same logic: the SRL can reimburse the director for a share of the housing costs (rent or rental value, energy, property withholding tax) proportional to the surface devoted to the professional activity relative to the total floor area. This reimbursement is deductible at company level provided it is documented, applied consistently and reasonable relative to the actual dimensions of the home.
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CIT rate and net tax saving
The concrete effect of a deductible expense depends on the tax rate the company is subject to. In Belgium, corporate income tax (CIT) applies at two levels.
The standard rate is 25%. For small companies within the meaning of Art. 1:24 of the Companies and Associations Code (CAC), a reduced rate of 20% applies to the first tranche of €100,000 of taxable profit. Beyond this threshold, the 25% rate resumes.
To access the reduced rate from tax year 2026, three additional conditions must be met. The director must receive a gross annual remuneration of at least €50,000 (the condition is deemed met if the remuneration is at least equal to the company's taxable result, even below the threshold). Benefits in kind may not exceed 20% of that remuneration. Start-up companies benefit from an exemption during their first four accounting years. The majority of shares must be held by natural persons, and the company may not be a financial holding whose share investments exceed 50% of the paid-up capital.
The tax saving of a deductible expense is therefore 20 cents per euro for a company at the reduced rate, and 25 cents for a company at the standard rate. On a taxable base of €100,000, the difference between the two rates represents €5,000 of CIT per year. Rigorous management of allowable expenses directly influences this result.
To understand how the taxable base is calculated, advance payments and the available tax benefits, our article on corporate income tax in Belgium presents the full mechanism.
Going further
- Setting up an SRL in Belgium: the essential steps, to properly structure your company from incorporation
- Corporate income tax in Belgium, to understand the calculation of the taxable base and advance payments
- The SRL financial plan, the essential tool to anticipate expenses and profitability from creation
- FPS Finance: corporate income tax, official source for the forms and circulars in force
