In our blog of 11 March 2024, we already discussed the reform of the patrimony tax and its consequences for (international) associations and private foundations. This “tax imposed in lieu of inheritance duties” was introduced in 1921 to prevent financial resources from remaining inactive for too long without contributing to economic growth or social progress. At the end of 2023, the legislator decided to modernise the patrimony tax, resulting in changes—effective 1 January 2024—to its scope of application, taxable base, and rate.
The rate was made progressive (0.15%-0.30%-0.45%), but this new progressive rate was mitigated through a 62.3% reduction of the taxable base for taxpayers active in certain sectors, including the healthcare sector, the cultural sector, the sports sector, the education sector, recognised sheltered workshops, medical centers, integrated healthcare associations and recognised community health centres, recognised animal shelters, and recognised private archive centres.
Associations and private foundations that do not fall within the scope of this partial exemption saw their patrimony tax increase considerably compared to the period prior to the reform, when a flat rate of 0.17% applied.
A number of these entities brought an action before the Constitutional Court, seeking annulment of the new provisions on the grounds of the arbitrary distinction between those who qualify for the preferential regime and those who do not.
In its judgment of 4 December 2025[1], the Constitutional Court largely follows the applicants’ arguments.
Violation of the principle of equality
The applicants argue that the contested provisions are discriminatory in so far as only legal persons active in certain sectors benefit from the 62.3% reduction of the taxable base.
The Constitutional Court emphasizes first and foremost that the legislator must be able to reasonably justify why certain taxpayers may benefit from the exception while others may not. If such differential treatment is not sufficiently motivated, it constitutes a violation of the principle of equality.
The legislator puts forward several reasons for reducing the taxable base in specific sectors. For the healthcare sector — where associations and foundations often rely on costly infrastructure and equipment — the legislator seeks to avoid making access to healthcare more expensive. With respect to the sports and cultural sectors, the legislator argues that it wishes to avoid a “circular subsidy operation” in which an increase in fiscal burdens on the supply side requires additional public support for these sectors on the demand side through sport and culture vouchers. Similar reasoning is presented for the other privileged sectors.
The Constitutional Court finds these reasons insufficient. Although legitimate in themselves, the Court considers them too broadly formulated and equally applicable by analogy to other taxpayers who are not included in the preferential regime under the reform.
The Court concludes that the reasons advanced do not demonstrate a relevant difference between the favored sectors and other comparable taxpayers. Other taxpayers are therefore unlawfully deprived of an advantage. The principle of equality is violated.
Consequences
The Constitutional Court annuls the provision granting a 62.3% reduction of the taxable base for taxpayers in certain sectors (Article 15, 2°, b of the Law of 28 December 2023). To avoid subjecting these categories of taxpayers retroactively to an unforeseen fiscal burden, the Court maintains the effects of the annulled provision until 31 December 2026 at the latest.
This means that these taxpayers may continue to benefit from the partial exemption until that date.
The question now arises as to how the legislator will respond. The legislator may choose to design a broader or, conversely, a more limited preferential regime (e.g. restricted solely to the healthcare sector). Whatever option is chosen, the solution will have to withstand constitutional scrutiny. The legislator may also opt to take no action. In that case, as from 1 January 2027, no association or private foundation will be able to make use of the preferential regime. It should also be recalled that the federal government, according to its coalition agreement (2024–2029), already expressed the intention to reform non‑profit taxation. It therefore remains to be seen in which direction matters will evolve.
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If you have any questions regarding this topic, please contact:
Sarah Verschaeve, partner (sarah.verschaeve@aurionlaw.be)
Celie Huybens, associate (celie.huybens@aurionlaw.be)
Simon Van Eekert, associate (simon.vaneekert@aurionlaw.be)
[1] Judgment of the Constitutional Court of 4 December 2025 (No. 159/2025); Press Release of the Constitutional Court concerning Judgment No. 159/2025 of 4 December 2025.