The investment tax deduction
Through the investment tax deduction, some taxpayers can reduce their taxable profit by a certain percentage of the amount that the company is spending on a new investment. This deduction can be increased (by up to 13.5% or 20.5% depending on whether the deduction is once-off or spread out over time) for investments concerning research & development or investments linked to the depositing of patents.
Patent income deduction
The patent deduction makes it possible to exempt up to 80% of the income from certain patents, which represents a maximum tax burden of 6.8% (instead of 33.99%).
Note: The Belgian government is expected to introduce a new innovation income deduction regime this year to replace its patent income deduction regime
Partial exemption of payroll tax for researchers
The companies that are targeted with this measure are the ones that:
- implement research or development programmes with researchers that have specific degrees
- employ researchers in scientific research projects carried out in cooperation with one or more universities or colleges or recognised scientific institutions
- have been in existence for less than 10 years and devote at least 15% of their expenditure to research (Young Innovative Company)
These companies are exempted from payroll tax for up to 80%.
Once-off innovation premium
To stimulate the culture of innovation in industry, Belgium encourages the employer’s awarding of an innovation premium to their creative employees. The measure consists of the full tax exemption of all compensation awarded by the employer to the creative employees as reward when they express a new idea, adopted by the company.