What does investcoop consists of?
This tax scheme aims to encourage private individuals to acquire shares in social credit cooperatives, by granting a tax credit. Credit cooperatives are cooperatives specialising in granting business credits to companies with added social value. The increase in their capital enables them to develop their credit offer, which benefits businesses.
By using private savings for social credit cooperatives, this measure facilitates the financing of businesses (including social businesses) and self-employed people, who often find it difficult to obtain funding from traditional financial stakeholders such as banks.
In this context, credit cooperatives are valuable as they cover some of these financing blind spots.
How does it work?
In practical terms, to use private savings, a tax credit is granted for five successive tax periods when an individual (subject to IPP in the BCR) acquires a cooperative share. The annual tax credit rate is 3.5% of the amount taken out. To receive a tax benefit, the cooperative member must invest a minimum of 100 euros per cooperative.
Who can benefit from the tax credit?
In summary, the tax credit is available to anyone:
- subject to personal income tax in the Brussels-Capital Region
- who acquires shares privately in one of the eligible cooperatives
- for a minimum of €100 in at least one cooperative
- who is still in possession of the shares at the end of the tax period to which the tax credit relates, i.e. 31 December.
The tax benefit is limited to a total investment of €100,000 per taxpayer. If your total investment (in one or more cooperatives) is higher than this, the amount taken into consideration for the tax credit will automatically be reduced to the €100,000 ceiling
Example of tax credit calculation
A person subject to personal income tax in the Brussels-Capital Region (i.e. in general, domiciled in the Brussels-Capital Region since at least 1 January of the year in which they take out shares) takes out €1,000 of shares in one of the cooperatives in September 2023 and keeps them until 2030.
They will receive a total tax credit of €175, i.e. €35 per year for five years.
How to apply for a tax credit?
Each year, you will receive a declaration from the cooperative in which you have invested. This information must be mentioned in your tax declaration.
Conditions for the credit cooperatives
To be eligible, the credit cooperatives must meet a number of conditions :
- First, conditions that ensure the seriousness and stability of the cooperative and reassure the saver :
- the cooperative is accredited as a "social and democratic enterprise" within the meaning of the Ordinance of 23 July 2018 on the accreditation and support of social enterprises;
- it can have a European, federal, regional or equivalent public guarantee covering part of its credits and equity investments;
- Second, conditions that ensure that the cooperatives are using the mobilised savings to finance Brussels companies.
- The cooperative can demonstrate that its capital is being sufficiently used in credits to businesses or equity investments in businesses, and can demonstrate that it finances businesses with an establishment in the Brussels-Capital Region.
Compliance with these conditions is the responsibility of Brussels Economy and Employment.
This instrument came into force on 1 June 2023
Want to know more?
All information can be found on https://www.investcoop.brussels/fr/