The new Walloon budget decree adopted in late December puts an end to the particularly advantageous Marshall Plan regime and radically redefines the tax framework applicable to industrial investment in Wallonia.
Why this change of heart?
Since the "Marshall Plan" decree, investments made from 1 January 2006 have benefited from significant exemptions from regional and municipal taxes. For almost two decades, this scheme has helped to considerably reduce the cost of industrial investment and encourage the development of new activities in Wallonia. However, it has also deprived local authorities of a significant amount of their tax revenue.
To compensate for these losses, the Region had set up a financing mechanism to reimburse the amounts not received. However, this system has become progressively more difficult to sustain and has been unable to compensate the municipalities and provinces in full since January 2025. It was in this tight budgetary context that the Programme Decree of 19 December 2025 was adopted.
What does this mean in practical terms?
1. Property tax
Property tax is an annual regional tax, calculated on the cadastral income of real estate, including certain equipment and machinery considered to be ‘immovable property by nature or purpose’ in an industrial site. Although the municipalities and provinces do not set the tax rules, they do apply their own additional charges, which influence the final amount payable by taxpayers.
The new regional decree radically overhauls the exemption scheme for industrial investment.
Two major changes have been made:
- Investments made between 2005 and 2020: they will become taxable from the 2026 financial year.
- Investments made since 2021: the exemption now only applies for five years from 1 January of the year following the year of investment. Take the example of equipment acquired in 2021: previously fully exempt under the Marshall Plan, it will now only benefit from exemption for five years and will therefore become taxable as of 2027.
2. Municipal compensatory industrial tax
Some Walloon municipalities have introduced a compensatory industrial tax (“taxe industrielle compensatoire”, TIC) on the industrial facilities located on their territory. This tax is calculated on the basis of the cadastral income subject to property tax (any exemption from or reduction in property tax results in an exemption from or reduction in the tax).
As a knock-on effect, the abolition of the property tax exemption will mean that industrial equipment acquired since 2005 will once again be taxable (with investments made since 2021 also being exempt for five years).
3. Return of the tax on municipal motive power
This is a municipal tax calculated on the mechanical power of stationary engines installed in businesses (“taxe sur la force motrice communale”, TFM), whether they are production engines, compressors, turbines or any other mechanically driven equipment. Taxable power is expressed in kilowatts (kW), based on the engines present in the facilities on 1 January of the tax year.
The Walloon Marshall Plan had abolished this tax on municipal motive power for all engines acquired since 2006.
From 1 January 2026, Wallonia will once again allow municipalities to levy a tax on motive power for all investments made since 2006, and will also limit the exemption to five years for investments made from 2021 onwards.
It should be noted, however, that the Walloon decree sets the maximum rate of the tax at €24.69 per kW, modulated by a system of degressive coefficients designed to limit the impact on highly motorised sites:
- a coefficient of 0.99 is applied from the second engine;
- it gradually decreases to 0.71 for the thirtieth;
- beyond that, a minimum coefficient of 0.70 is applied.
Please note:
While the decree provides a framework for the tax at regional level, each municipality remains free to levy it or not, and to set its own terms and exemptions. The practical effects of the reform may therefore vary significantly from one municipality to another.
What impact does this have?
For many industrial companies - both large and small - this reform will lead to a significant increase in the tax burden as of this year. In some cases, this may amount to several million euros.
All sectors that are intensive in terms of new equipment and tooling - energy, chemicals, steel, glass, cement, paper, automotive, aerospace, etc. - are therefore affected by this reversal.
The amounts involved vary depending on the municipality, but the orders of magnitude are unequivocal: property tax alone can amount to up to 1.3% of the value of the investments concerned made since 2006, representing an additional cost per year over the useful life of the equipment.
This change is all the more painful for businesses because it was not anticipated when investment decisions were made, nor could it be budgeted for in 2026, bearing in mind that it was adopted in late December 2025.
What now?
Against this backdrop, it is essential for companies to have a clear, forward-looking view of their situation in order to assess the impact of this major change.
Many companies have never carried out this analysis, as the general Marshall Plan exemption made it unnecessary until now: their tax base could therefore be overestimated.
In addition, reduction and exemption mechanisms are in place. However, these are often little-known and require a detailed analysis of each investment, its actual use and its allocation.
If you would like to discuss this or assess the impact of these changes on your situation in more detail, please do not hesitate to contact a member of our Tax team.
