What is the impact of tax reform on maintenance payments?

What has changed?

In the past, maintenance debtors could deduct 80% of the maintenance payments made for tax purposes, provided that four cumulative conditions were met:

1. The maintenance obligation is based on the Civil Code or the Judicial Code, or on equivalent foreign legislation.
2. The recipient of the maintenance payment is not part of the payer’s household.
3. The maintenance payment is made regularly.
4. The payments can be proven with supporting documents.

That regime was intended to reduce the payer’s financial burden. Today, it is clear that this deductibility is being phased down. The deductibility of maintenance payments is gradually reduced from 80% to 50%. In addition, maintenance payments made to recipients outside the EU or Switzerland are, in principle, no longer deductible.

In practical terms, this means that maintenance payments made in income year 2025 still qualify for tax treatment at 70%, in income year 2026 at 60%, and in income year 2027 at 50%.

An example immediately shows the impact of these decreasing percentages. Suppose you pay a monthly maintenance contribution of EUR 600 for your two children. The tax advantage will then be significantly lower today and in the coming years than it was under the previous regime.

As you can see, this is a substantial reduction in deductibility over a relatively short period.

For people who took the tax benefit into account when setting the amount of maintenance payments in the past, this phase-down often comes as an unexpected financial setback. These new rules will also affect future negotiations on maintenance payments. Parties will more quickly take the lower deductibility into account, which may put pressure on the amount of the maintenance contribution.

Legal certainty

The tax reform continues to raise questions about legal certainty for the parties involved. Agreements made in the past were often concluded with tax benefits in mind that are now being reduced or are disappearing.

In this context, the constitutional principle of the rule of law remains important. This principle means that legal rules must not only exist, but must also be applied in a transparent, consistent and careful manner. In addition, citizens must be treated equally before the law.

When tax changes affect agreements made earlier, this may lead to discussions about proportionality, reasonableness and the protection of legitimate expectations.

These changes therefore affect not only the personal financial situation of many people, but also the principle of legal certainty. That principle gives citizens a certain degree of stability with regard to the legislation that applies to them. It gives them the assurance that they know their rights and obligations and can rely on them.

To safeguard legal certainty, the authorities must make citizens familiar, within a reasonable period of time, with the rules that apply to them. When tax rules change significantly and affect existing agreements, uncertainty inevitably follows.

Adjustment of maintenance payments

First of all, parents can agree between themselves to change the amount of the maintenance contribution. It remains advisable to have such an agreement approved by the court in order to avoid future disputes.

In addition, a revision may also take place on the basis of Article 209 of the former Civil Code.

Maintenance payments may also be adjusted when three cumulative conditions are met:

1. There are new circumstances.
2. Those circumstances arise outside the will of the parties.
3. They significantly change the situation of the parties or their children.

The key question, of course, is whether the tax reform meets those conditions in every case. In some situations, the lower deductibility will have a substantial impact on the maintenance debtor’s financial capacity. In other cases, that impact will be more limited. Much will therefore depend on the specific circumstances and on the court’s assessment.

Permanent saisin

Under Article 1253ter/7 of the Judicial Code, the judge may revise a maintenance contribution through the so-called permanent seisin procedure. But even there, the question remains whether a tax law amendment as such is sufficient to trigger that procedure.

The permanent seisin procedure can only be invoked when there are new elements. In some cases, the tax reform may be regarded as such a new element, but that is by no means self-evident.

To successfully rely on the permanent seisin procedure, it will have to be shown that the tax change leads to a substantial change in the financial situation of the parties involved. That will differ from one case to another and will also depend on the judge’s interpretation.

In other words, one judge may consider this sufficient grounds for a revision, while another may take a stricter view.