In Belgium, incentive plans are commonly offered to senior executives, key management, and highly qualified employees, with some plans extended more broadly or collectively to employees.

The most common types of plan include:

• Cash-based short- and long-term incentive plans (STIs/LTIPs)
• Non-recurring result-linked benefits (collective bonus CBA No. 90)
• Share option plans (often under the Belgian stock option tax regime)
• Restricted stock units (RSUs)
• Performance shares
• Profit participation plans

Belgian legislation allows a broad range of share option plans, including:

• Options over shares of the employer
• Options over shares of a Belgian or foreign group company
• Options over listed or unlisted shares

The prevailing structure is the Belgian stock option regime established under the Act of 26 March 1999, which is applicable where share options are offered in writing and accepted by the employee in writing within 60 days of the day of the offer. The offer letter must specify all the characteristics of the share option plan, including:

• The number of share options
• The number of underlying shares
• The exercise price
• The exercise period

These qualifying share option plans are taxable upfront at grant and may benefit from a favourable tax (and social security) regime provided certain conditions are met.

When the share options do not fall within the scope of the Act of 26 March 1999 (e.g. accepted after 60 days following the offer or no acceptance in writing), these options are considered, by the Belgian authorities, as share purchase plans and their tax (and social security) treatment follow the one applicable to share purchase plans.

Share acquisition plans may include:

• Employee share purchase plans (ESPPs) (often with a discount)
• Free share plans (restricted or performance-based)
• Matching share plans

Shares may be newly issued or existing shares, and may relate to Belgian or foreign companies.

• Cash-based short- and long-term incentive plans (STIs/LTIPs)
• Non-recurring result-linked benefits (Collective bonus CBA No. 90)
  Under this scheme, all employees or a category of employees can receive benefits linked to the company’s results or to the achievement of predetermined collective objectives, without constituting “remuneration”. The aim is to increase employee motivation by involving them in a common company project
• Profit participation plans

Under a profit participation scheme, a certain proportion of the profit for the financial year after tax is distributed to employees, in the form of money or stock.

There are no restrictions in Belgium on who can participate to an incentive plan. Employers can grant incentives on a discretionary basis to certain employees, provided there is no prohibited direct or indirect discrimination. Certain incentive plans, such as non-recurring result-linked benefits and profit participation plans, are collective schemes, although differentiation is possible under specific legal conditions.

Certain incentive plans are subject to quantitative thresholds that cap the value eligible for the application of a specific statutory or tax regime.

• The Law of 26 March 1999 imposes thresholds for qualifying share option plans when the underlying securities are shares in an investment company with variable capital (société d’investissement à capital variable) (SICAV)/ beleggingsvennootschap met veranderlijk kapitaal (BEVEK)). This threshold limits the granted value of the share options to 20% of the total of the employee’s:

• Regular annual gross salary
• Thirteenth month pay
• Vacation pay
• Variable remuneration amount

• Up to a cap of 3.701 EUR in 2026 per employee, the collective bonus (CBA No. 90) is exempt from personal income tax.
• The total amount of profit participation allocated in the form of

• shares cannot exceed 10% of the total gross wage bill and 20% of the profit for the financial year after deduction of taxes.
• Cash cannot exceed 30% of the total gross wage bill

In listed companies, independent non-executive directors cannot receive any variable remuneration. The Code of corporate governance (CCG) applicable to the Belgian listed companies recommends (in a comply or explain logic) that non executive directors do not receive “any performance-related remuneration”. Since 2020, the grant of shares in the company is officially ‘recommended’ as a good practice for non-executive directors of listed companies.

Within the financial sector, no restriction applies on who can participate in incentive plans, but caps apply on the amount of such variable compensation when it is granted to staff members identified as ‘material risk takers’ (e.g. within credit institutions, the variable compensation is capped at maximum 50% of the annual fixed remuneration.

Yes. Belgian law allows:

• Performance conditions
• Time-based vesting
• Forfeiture provisions. Forfeiture clauses are enforceable, particularly for incentive compensation.

Within listed companies, in share plans where employees are granted free shares or discounted shares, it is common that the shares are blocked (more exactly, that employees agree to make the shares unavailable) for at least two years, in order to benefit from a discount of 20/120th (16.67%) of the taxable benefit.

Within listed companies, the Code recommends that part of the remuneration of non-executive directors should be paid in the form of shares in the company. These shares should be held until at least one year after the end of the board mandate and at least three years after the time of award.

Also, within listed companies, unless shareholders’ approval (or contrary mention within the articles of association), shares or stock options granted to executive directors may not vest or be exercised before the end of three years after the grant.

Within banks and other institutions of the financial sector (eg UCITS firms), as well as within insurance undertaking, a portion of the variable remuneration of the staff members identified as ‘material risk takers’ must be deferred over a specific period of time (eg at least 40 % of the variable remuneration, or 60 % if it exceeds 200.000 EUR must be deferred over a period of at least four years, for MRTs within credit institutions). It is not a strict post-vesting requirement because the deferred portions of the variable remuneration shall only vest at each deferred period.

Incentive plans increasingly provide for malus and clawback provisions in certain situations (fraud, payments made on the basis of incorrect financial results, etc.).

Within banks and other institutions in the financial sector, the remuneration policies (or the incentive plan itself) must include such mechanisms, and they must be applied when the situations justifying them arise.

For listed companies, it is recommended to include malus and clawback clauses with respect to the variable remuneration of executives. If the company does not provide for such mechanism, it must explain the reason for this in its annual report.

In practice, we note that these clauses are becoming increasingly widespread, including in non regulated sectors.

What are the tax and social security consequences for participants in an incentive plan including: see table

(i) on grant;
(ii) on vesting;
(iii) on exercise;
(iv) on the acquisition, holding and/or disposal of any underlying shares or securities; and

There are no social security implications when the shares are sold.
The sale, up to 31 December 2025, of the acquired shares is a private transaction not subject to income tax. As from 1 January 2026, capital gains realised on the sale of acquired shares is still considered as a private transaction but is subject to a 10% capital gain tax, on the positive difference between the acquisition value and the sale price. The acquisition value is the fair market value of the acquired share upon purchase of the share.

There will be a general exemption on capital gains up to EUR 10,000 per year (to be indexed annually) per taxpayer. This threshold can be increased by a maximum of EUR 1,000 per year if less than 10% of the EUR 10,000 threshold is used. The unused part of that additional amount can be carried forward to next year(s), without exceeding a total exemption of EUR15,000 per year.

Capital losses are deductible under certain conditions.

Employees with their usual residence in Belgium are subject to a stock exchange tax of 0.35% when a professional intermediary established in Belgium or abroad processes the transaction (if the shares are listed on a stock market).

An exit tax applies to unrealized capital gains when a Belgian resident relocated outside Belgium. However, a deferral mechanism is available allowing effective payment only if the shares are sold within two years. After such period, no exit tax applies. Also, no exit tax is due if the taxpayer returns to Belgium within two years.

(v) in connection with any loans offered to participants (either by the company operating the incentive plan, the employer of the participant (if different) or a third party) as part of the incentive plan.

A loan granted to beneficiaries of incentive plans in order to finance tax or purchase equity-based incentives constitute a benefit subject to social security and income tax if the loan is interest-free or the charged interest is below a reference interest rate that is fixed by Royal Decree and updated yearly.

Employer’s social security and withholding tax are generally due at the same moments than employees’ obligations (see question 9).

Generally speaking, incentive plans costs are corporate tax deductible as remuneration costs provided there are duly reported on annual tax statements. Profit participation premiums though are non-deductible professional expenses for the employer.

Employers must include incentive plan benefits, just like other employment income, in the appropriate section of an employee’s annual salary statement.

This depends on what is provided for in the incentive plans and in the employment contracts. In general, long term incentive plans are designed not only as reward mechanisms but also as retention tools. Accordingly, they typically stipulate that in the event of resignation, any elements that have not yet vested or been paid are forfeited. In the event of termination by the company, the plans generally provide for different scenarios (so called “good leaver” or “bad leaver” clauses), ranging from pro rata payment based on time served to the forfeiture of the incentive. Such clauses, as well as conditions requiring the employee to be employed on the payment date (presence conditions), are valid under Belgian law if they were clearly set out in the plan or agreed with the employees.

For annual bonuses, similar rules may be included in the bonus plan.

If nothing is provided and the employment relationship ends before the vesting or payment date, the question will arise as to whether the payment of the variable remuneration is discretionary and therefore whether the employee is entitled to the variable remuneration. It is quite common that employment contracts stipulate that bonus payments are always discretionary and that the employee cannot assert any right to payment.

In the absence of a clear and valid presence requirement, and where a bonus has been paid every year, the employee will have arguments to claim a pro rata payment based on time worked once the employment terminates.

Specific rules apply to commercial representatives and commercial agents (who retain the right to certain commissions after the end of the working relationship.

No specific data protection requirements or obligations apply to an offer of participation in an employee incentive plan. However, the general rules on data protection of the General Data Protection Regulation ((EU) 2016/679 (GDPR) and the Belgian national legislation apply. Personal data can only be processed under one of the legal grounds for processing data listed in the GDPR. The following grounds are relevant for employee share plans:

• Processing necessary for the performance of a contract to which the data subject (the employee) is a party.
• Processing necessary for compliance with a legal obligation (such as a tax obligation).
• Processing necessary for the purposes of the legitimate interests pursued by the controller (such as the employer’s legitimate need to protect itself from litigation liabilities).

In addition to the requirement for a legal ground, the GDPR also requires detailed information on the processing activities to be provided to the data subject, such as information on:

• The purposes of the processing.
• The legal ground of the processing.
• The data retention policy.

The information on the processing of personal data within the framework of the employee share plan can be included in the company’s general employee privacy notice. Alternatively, this information can be provided in a separate notice.

All other principles of the GDPR must also be respected, such as data minimisation, transparency, integrity, and confidentiality (implying that proper security measures must be taken).

Where necessary, personal data can be transferred to other EEA countries without taking any further measures. Transfer of personal data to a third country (outside the EEA) is only possible in the cases listed by the GDPR, most notably where either:

• The European Commission has made an “adequacy decision” for the country.
• The companies involved provide appropriate safeguards for the protection of personal data in another way (such as binding corporate rules adopted at group level or standard contractual clauses). In that case, they must also carry out a data transfer impact assessment and adopt supplementary protective measures if necessary.

Incentive plans are generally managed at board level, upon recommendation of a remuneration committee when such committee exists (eg within listed companies, financial institutions, etc.).

In a listed company, the remuneration of executives must comply with the remuneration policy approved by the general meeting of shareholders.

There are also specific rules regarding incentive plans for executives. In particular, long term variable remuneration must always outweigh short term remuneration. Accordingly, unless otherwise provided in the articles of association or expressly approved by the general meeting, at least one quarter of an executive’s variable remuneration in a listed company must be based on predetermined and objectively measurable performance criteria over a period of at least two years, and another quarter must be based on predetermined and objectively measurable criteria over a period of at least three years. This means that the short term incentive (based on one-year results) may represent a maximum of 50% of the total variable remuneration.

It is also recommended to set a cap on short term variable remuneration of the executives.

Furthermore, the Corporate Governance Code (applicable to listed companies) recommends that the board sets a minimum shareholding requirement for executives. This does not mean that they must necessarily be remunerated in shares of the company, but rather that they must hold a sufficient number of shares (for example, the equivalent of one year of fixed remuneration).

Finally, in a listed company, unless otherwise provided in the articles of association or expressly approved by the general meeting, an executive may acquire shares definitively or exercise share options as remuneration only after a period of at least three years following their award.

Finally, the remuneration of executives must be disclosed annually in the remuneration report (a section of the annual report).

The Prospectus Regulation (EU 2017/1129) provides an exemption from the requirement to publish a prospectus for securities offered, allotted, or to be allotted to existing or former directors or employees by their employer or an affiliated undertaking, provided that a document is made available containing information on the number and nature of the securities, and the reasons for and detail of the offer or allotment.

The Law of 11 July 2018 regarding the offering of securities to the public and the admission of securities to trading on a regulated market refers to the applicable prospectus exception for employee share plans in the Prospectus Regulation.

As mentioned under question 14, specialist regulatory regimes apply to incentives of executives in listed companies.

One should also note the specialist regulatory regimes applicable to staff members identified as “material risk takers” within a credit institutions (similar regimes apply to other institutions of the financial sector and to insurance undertakings). Within the banks, the most significant constraint is the cap on variable remuneration. The ratio between fixed and variable compensation for risk takers is 50%: on an annual basis, any element qualifying as variable compensation cannot exceed 50% of fixed compensation. This is stricter than the European requirement of 100%, and Belgium does not allow an increase to 200% with shareholder approval, as the Directive CRD permits. Additional requirements include that a significant portion of the variable remuneration must be deferred over a period of at least four years; at least 50% of variable remuneration must be paid in financial instruments; a blocking period applies on the instruments; etc.

There are no exchange control regulations affecting employees sending money from Belgium to another jurisdiction to purchase shares under an employee share plan.

In practice, payments by employees are often made to the employer, which in turn pays the total sum to the company selling the shares.

Reporting formalities can apply if a Belgian company makes payments exceeding EUR 100,000 to certain jurisdictions.

The formal process for granting awards under an incentive plan in Belgium will depend on the type of incentives granted.

Where, for the employees covered by the system of non-recurring result-linked benefits, a trade union delegation is present within the company, the benefits must be introduced by means of a collective bargaining agreement concluded at company level. In the absence of such a trade union delegation, the collective bonus may be introduced through an accession act, which must follow a strict statutory procedure. The same principles apply for participations plans that foresee differentiation in the amounts distributed or distribution in the forms of shares.

More generally, incentive plans will follow a structured and formal process designed to ensure legal, tax, and social security compliance. The process typically begins with the design and legal qualification of the plan, including the identification of the applicable statutory regime and eligibility conditions.

The plan and the proposed grants must then receive the necessary corporate approvals from the competent bodies, such as the board of directors and, where required, the shareholders’ meeting. This is followed by the finalisation of plan documentation and, for collective plans, the information and consultation of employee representatives.

Awards are formally granted through an individual allocation decision, which may require written acceptance by beneficiaries to benefit from a specific regime. The employer must ensure proper tax and payroll reporting at the relevant taxable moment.

Finally, the plan is subject to ongoing administration and monitoring until settlement, exercise, or payout of the awards, with continued compliance obligations throughout the life of the plan.

Yes, it is quite common in Belgium. Remuneration granted by a non-Belgian company.

Where incentives are granted or paid by a related foreign company (as per Article 1:20 of the Companies and Associations Code) to employees and company directors by reason of or at the occasion of their professional activity exercised on behalf of such a Belgian company (e.g. typically share-related remuneration but it also concerns other remuneration such as for example bonus payments), withholding tax and reporting requirements arise in the hands of the Belgian company.

Yes, subject to tax and employment law considerations.

If share options or awards are granted for professional activities that are taxable in multiple jurisdictions, either immediately or in time over the vesting period, sourcing of taxation should apply based on article 15 (OECD Model Convention) of the applicable tax treaty.

Special attention should be paid to Belgian qualifying stock options which are taxable upon grant while many other countries tax options upon exercise only.

When an employee works in multiple countries simultaneously or consecutively during the vesting period (the period between the offer and the vesting dates), the Belgian tax authorities consider it crucial to determine to which activities the benefit of the stock options is linked.

The Belgian tax authorities make a distinction between the situation wherein (1) the stock options are granted unconditionally, (2) are granted under a resolving condition and (3) are granted subject to a suspensive condition:

(1) The stock options are taxable in the country at the time of grant if they fall under the scope of the Stock-Option Act.

(2) The options are definitely acquired by the employee at grant. Consequently the stock options are deemed to be linked to the activities exercised at the time of grant.

(3) The stock options are only definitely acquired (read: the employee already owned the options, but they can no longer be lost) by the employee once the suspensive condition is fulfilled. The stock options are therefore linked to the activities during the vesting period.

For the sake of completeness, the existence of a suspensive condition does not prevent tax liability being triggered at the time of grant in case of stock options qualifying under the Stock-Option Act. In such a case, if the employee moves to another country to physically work in that other country (and a tax liability arises in that other country on the basis of article 15 OECD-tax treaty model), Belgium remains only entitled to subject to Belgian taxes a part of the benefit in kind (period the employee was tax liable in Belgium during the vesting period). However, as previously pointed out, under Belgian internal law, taxation of qualifying stock options arises 60 days after the offer. In practice this means that taxes are payable on the whole (100%) benefit in kind of the stock options (in accordance with Belgian domestic tax law – see above). Afterwards, when the option is exercised, the taxation will possibly be revised if it would appear at that time that the benefit in kind resulting from the option is not exclusively taxable in Belgium and has suffered in another country double taxation at exercise e.g.)

In case of non-qualifying conditional stock options, which are taxable at exercise as shares purchase plans, the benefit in kind will be splitted between the countries concerned in accordance with article 15 of the double tax treaty.

If cash-based incentives are granted for professional activities that are taxable in multiple jurisdictions, either immediately or in time over the vesting period, sourcing of taxation should apply based on article 15 (OECD Model Convention) of the applicable tax treaty.

The search for tax and social security advantageous incentives to combat rising wages is increasing.

The new capital gain tax of which final text has not yet been voted but that will apply retroactively as from January 1, 2026 will affect the final net proceeds of stock-based incentive plans.