Benefits in kind: the new 2026 tax cap

Personal income tax reform: from the 2027 tax year (2026 income), lump-sum benefits in kind — including stock options — will be capped at 20% of total taxable remuneration. Here’s how the mechanism works, what it covers, and what it means for your company.

What the personal income tax reform changes

Lawmakers have introduced an entirely new mechanism that penalises lump-sum benefits in kind once they’re deemed “excessive” within a company’s overall pay policy. The measure takes effect from the 2027 tax year, meaning income received in 2026.

Until now, companies assessed the tax appeal of an option plan when it was first set up, with no obligation to keep monitoring it afterwards. That’s no longer enough: compliance with the threshold will need to be checked on an ongoing basis, year after year, against planned grants.

Which benefits fall under the 20% cap

The cap doesn’t just apply to stock options valued on a lump-sum basis under the Law of 26 March 1999. It covers every lump-sum benefit in kind: company cars, mobile phones, phone and internet subscriptions, computers, housing provided free of charge by the employer, and interest-free or reduced-rate loans granted by the employer. Social benefits and benefits valued at their actual market value are not concerned by the measure.

The threshold itself is straightforward: these benefits can’t exceed 20% of the total taxable remuneration paid during the taxable period.

How the 20% threshold is calculated

The key point to take on board: the cap isn’t assessed individually, employee by employee. It’s assessed collectively and separately for two categories of beneficiaries:

• all employees, based on the remuneration reported on 281.10 forms;
• all company directors, based on the remuneration reported on 281.20 forms.

This collective logic has a direct consequence: a limited number of substantial stock option grants can be enough to push the cap for an entire category of beneficiaries over the edge — with tax consequences for the employer.

What happens if the cap is breached

The consequences differ depending on whether you’re looking at employees or company directors. For employees, the excess portion is subject to a separate 7.5% contribution, non-deductible for the employer’s income tax. For directors, the penalty is different and more limited: the loss of the reduced corporate tax rate. We cover each case in two dedicated articles — Directors’ stock options: what’s the tax impact in 2026? and Employee stock options: the risk of the 7.5% contribution — because the stakes and the amounts involved are very different.

How to get ahead of this now

The reform doesn’t undermine the case for stock options or other incentive schemes built on lump-sum benefits. What it does impose is a level of ongoing monitoring that most companies haven’t had to apply before. Four questions are worth asking in your company right now:

• What proportion of overall remuneration currently comes from lump-sum benefits?
• Could any planned new option grants push you over the 20% threshold?
• Are the beneficiaries mainly employees or company directors?
• Does your current pay structure remain the most tax-efficient in light of this new tax framework?

FAQ

Since when has the 20% cap reform applied?

The measure applies from the 2027 tax year, meaning income received in 2026. Stock options granted that year will therefore fall under the new check.

Is the 20% threshold assessed benefit by benefit or globally?

It’s assessed globally, not benefit by benefit. You add up every lump-sum benefit in kind (stock options, company car, mobile phone, computer, free housing, interest-free or reduced-rate loans from the employer) paid to a category of beneficiaries, then compare that total to 20% of their total taxable remuneration.

Which benefits fall outside this cap?

Social benefits aren’t covered by the measure. The cap only applies to benefits in kind valued on a lump-sum basis — a specific tax category that includes stock options falling under the Law of 26 March 1999. Benefits in kind valued at their actual market value are excluded too.

Is a company that only grants options to one or two directors safe?

No. Because the threshold is assessed collectively by category of beneficiary, a handful of substantial grants to just two directors could be enough to push the whole category over the cap — even if only a couple of people actually benefit.

Does this reform scrap the 1999 stock options tax regime?

No. The specific regime introduced by the Law of 26 March 1999 stays in place. The reform doesn’t end that favourable tax treatment: beneficiaries will still be taxed on a lump-sum benefit when the options are granted. What it adds is an extra control threshold, beyond which an additional tax charge applies to the employer. In practice, that means the employer’s tax cost can rise wherever these benefits take up too large a share of the company’s overall pay policy.