IPP

What is IPP?

IPP (impôt des personnes physiques, PB in Dutch) is Belgian personal income tax, the tax on individuals' income. For a self-employed person trading in their own name, it is levied on business profit after deducting expenses and social security contributions. For a company director, it is levied on the remuneration they pay themselves.

It is progressive by bracket and increased by the surcharges set by each municipality. That makes it the only Belgian tax whose final rate depends on your address.

The tax brackets

There are four successive brackets, each applying only to the part of income that falls between its two thresholds.

• 25% from €0 to €16,320
• 40% from €16,320 to €28,800
• 45% from €28,800 to €49,840
• 50% above €49,840

Marginal rate and average rate: two different things

The marginal rate is the rate charged on the next euro you earn. The average rate is total tax divided by income. The second is always well below the first, precisely because the lower brackets are still taxed at their own rate.

Yet it is the marginal rate that matters when making decisions. Every deduction, the PLCI/VAPZ (free supplementary pension for the self-employed) included, comes off the top of your income and therefore saves tax at the marginal rate, not the average rate.

Municipal surcharges

Each municipality applies a percentage to the federal IPP due. The national average is around 7.5%, with actual rates ranging from 0% to 9% depending on the municipality.

This surcharge brings the effective marginal rate to roughly 53.75% in the top bracket. That is the figure to use when assessing the real return on a deduction.

The tax-free allowance

A first slice of income, €10,910 in 2026, is not taxed. It is taken off before the scale is applied, which lowers every taxpayer's taxable base by the same amount.

Increases are available, notably for dependent children. They raise the tax-free allowance and so reduce the tax, independently of the scale.

Not to be confused with

The terms close to IPP and what sets them apart.

IPP and Corporate income tax

Corporate income tax is levied on a company's profit at a flat rate, 25% or 20% for SMEs that meet the conditions. IPP is levied on an individual's income at a progressive rate.

IPP and NISSE social security contributions

Social security contributions are not a tax: they build entitlements, notably pension and healthcare, and are calculated on net taxable income before IPP.

Further reading

• 80% rule
• ATN, Avantage de Toute Nature (benefit in kind, BIK, VAA in Dutch)
• Business expenses
• Company car
• All glossary terms

IPP: frequently asked questions