Deductible Expenses for the Self-Employed and Companies in Belgium

Deducting business expenses is one of the most powerful levers for reducing your tax burden in Belgium. The principle is simple: any cost incurred for your business activity can be deducted from your taxable base, provided it meets the strict rules of the 1992 Income Tax Code (CIR 1992). This article reviews the main categories of deductible expenses, their limits, the proof required and the mistakes to avoid.

The legal framework: general conditions for deductibility

Under Article 49 of the CIR 1992, deductible expenses must meet four cumulative conditions:

1. Incurred or borne during the taxable period: the expense must have been incurred or paid during the relevant accounting year
2. Incurred to acquire or retain taxable income: the expense must have a direct link to the business activity
3. Substantiated by supporting documents (invoices, receipts, contracts, etc.)
4. Reasonable in amount: FPS Finance (SPF Finances) can reject expenses that are excessive or disproportionate

The burden of proof lies with the taxpayer: it is up to you to show that the expense qualifies as a deductible expense.

Actual expenses vs the flat-rate allowance

The statutory flat rate

Self-employed individuals can opt for a flat-rate business expense allowance instead of deducting their actual deductible expenses one by one. This flat rate is calculated automatically:

The flat rate is capped at EUR 5,520 (2026 indexed amount).

When should you choose actual expenses?

As soon as your real business expenses exceed EUR 5,520, it becomes more advantageous to deduct them individually. In practice, most self-employed people working full-time exceed this threshold.

Important: companies do not have the option of the flat rate. They must deduct actual expenses.

Expenses that are 100% deductible

The table below lists the most common fully deductible expenses by category.

Office and business premises costs

Home office (mixed use)

If you use part of your home for business purposes, only the business share is deductible. It is calculated pro rata to floor area:

Formula: (office floor area / total home floor area) x total charges

Example: a 15 m² office in an 80 m² flat = 18.75% of charges are deductible.

Charges eligible on a pro rata basis:

• Rent or mortgage interest
• Electricity, heating, water
• Internet
• Home insurance
• Property tax
• General maintenance

Tip: take photos of your workspace and draw up a plan with the dimensions. In the event of an inspection, FPS Finance systematically asks for this proof.

Staff costs

Social contributions and professional insurance

Administration and management costs

Communication costs

Travel costs (excluding cars)

Partially deductible expenses

Restaurant costs: 69%

Restaurant costs incurred for business purposes (business meals with clients, suppliers, partners) are deductible at 69% (Article 53, 8bis CIR).

Conditions:

• The meal must have a business purpose (not a private meal)
• The invoice must state the restaurant's name, the date and the amount
• It is recommended to note the names of the guests and the purpose of the meeting on the back of the invoice

Example: a business dinner costing EUR 150 (excl. VAT) → deduction of 150 x 69% = EUR 103.50.

VAT: VAT on restaurant costs is deductible at 100% (the 69% limitation only concerns income tax, not VAT).

Exception: the cost of meals taken alone (the self-employed person's midday meal) is not deductible as a restaurant expense. It is treated as a private expense. However, if the self-employed person cannot go home to eat, a benefit-in-kind employer allowance may be justified.

Client entertainment and business gifts: 50%

Client entertainment costs and business gifts are deductible at 50% (Article 53, 8 CIR).

This covers:

• Receptions organised for clients (cocktails, events, launches)
• Business gifts (wine, chocolate, promotional items)
• Catering costs for business events

VAT: VAT on entertainment costs is not deductible (Article 45, para. 3 of the VAT Code).

Exception: low-value promotional gifts (< EUR 50 per beneficiary per year) bearing the company name are 100% deductible and the VAT is deductible.

Clothing costs: strict limits

FPS Finance considers that everyday clothing, even worn for business purposes, is not deductible because it can also be worn privately.

Car costs: variable deductibility

Car costs are subject to complex rules covered in detail in our dedicated article. In summary:

Fuel costs are deductible in the same proportion as the vehicle costs, except fuel costs for combustion-engine vehicles, which are capped at a minimum of 50%.

Non-deductible expenses (disallowed expenses, DNA)

Certain items are never treated as deductible expenses:

Beware of fines: even "business" fines (a parking fine during a client visit, a speeding fine on a business trip) are not deductible. The only exception concerns proportional tax increases, which can, in some cases, be treated as deductible late-payment interest.

Mixed-use expenses: determining the business share

Many deductible expenses have both a business and a private use. For these mixed-use deductible expenses, only the business share is deductible.

Methods for determining the pro rata share

Method 1: Pro rata based on actual use

Keep a detailed record of business vs private use. Example for a mobile phone: note the percentage of business calls over a representative month. If 70% of calls are business calls, deduct 70% of the subscription.

Method 2: Flat-rate pro rata accepted by the administration

The tax authorities generally accept the following pro rata shares (administrative tolerances):

Tip: a pro rata share above 75% for a phone or internet subscription will almost always be challenged by the tax inspector. Stay reasonable.

Records to keep

What documents should you keep?

Keep the following proof for each category of deductible expenses:

Retention period

Records must be kept for 7 years from the end of the accounting year to which they relate (Article 315 CIR for personal income tax, Article 60 of the VAT Code for VAT).

Example: invoices for the 2025 financial year must be kept until 31 December 2032 at the very least.

Electronic record-keeping

FPS Finance accepts electronic record-keeping provided that:

• The scanned document is a faithful copy of the original
• Integrity and legibility are guaranteed throughout the retention period
• The document is accessible in the event of an inspection

Practical tip: systematically scan or photograph your paper receipts and invoices. Use accounting software (Dexxter, Billit, Yuki) that archives records automatically.

Important special cases

Expenses in the year of incorporation

In the year your company is incorporated, expenses incurred before the official start of the activity (incorporation costs, market research, initial stock) are deductible if they relate to the activity that is starting up.

Training costs

All training costs linked to your business activity are 100% deductible: continuing education, certifications, language courses, seminars, conferences, professional books and manuals. Training aimed at acquiring new skills related to the activity is also deductible.

Childcare costs

Self-employed people can benefit from a tax reduction for childcare costs for children under 14 (rather than a deduction as a business expense). The reduction is 45% of the amount paid, capped at EUR 16.40 per day per child (2026 amount).

Interest on business loans

Interest on a loan taken out to finance the business activity is 100% deductible. This covers:

• Loans to purchase equipment
• Loans to finance working capital
• Business overdraft facilities
• Interest on investment credit

Losses on receivables

Irrecoverable debts (customers who do not pay) can be deducted as business losses, provided you can show the debt is definitively lost (customer bankruptcy, statute of limitation, etc.).

Summary table of deductible expenses by category

Common mistakes and inspection risks

Warning signs for FPS Finance

FPS Finance primarily targets taxpayers whose business expenses are:

• Disproportionate relative to turnover (abnormally high expense/turnover ratio)
• Repetitive in certain categories (very high restaurant costs, excessive travel costs)
• Poorly documented (lack of supporting records)

The 5 most common mistakes

1. Deducting private expenses as business expenses (groceries, holidays, everyday clothing)
2. Having no supporting document for significant expenses
3. Overestimating the business share (deducting 100% of a phone bill when it is 50% private use)
4. Forgetting the restaurant cost limitation (deducting 100% instead of 69%)
5. Not applying the car cost limitation (deducting 100% when the CO2 formula gives a lower rate)

Official resources

• FPS Finance – Business expenses: finances.belgium.be
• Administrative circular on car costs: available on Fisconetplus
• Article 49 CIR 1992 (general conditions): available on Fisconetplus
• FPS Finance Contact Centre: 02 572 57 57

Conclusion

Mastering deductible expenses is essential for every self-employed person and company in Belgium. The rules to remember:

1. Document everything: keep every invoice, receipt and record for 7 years
2. Separate business from private: only deduct the genuinely business-related share
3. Respect the limitation rates: 69% for restaurants, 50% for entertainment, variable for cars
4. Switch to actual expenses as soon as you exceed the EUR 5,520 flat rate
5. Digitise your records: well-organised electronic archiving will save you in the event of an inspection
6. Consult your accountant for ambiguous cases: preventive advice beats a tax reassessment

Every euro of deductible expense correctly claimed saves you between 25 and 50 cents of tax, depending on your bracket. Over a year, the accumulation of these deductible expenses can represent several thousand euros of tax savings.

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This article was written by the Espero-Soft team for the blog dedicated to entrepreneurs in Belgium. For personalised advice, please consult a professional.