Modernizes its investment deduction regime to support innovation and sustainable investments
12 May 2024
On 12 May 2024, the Parliament of Belgium adopted the Miscellaneous Taxation Act to modernize the investment deduction regime, which allows companies and self-employed individuals to reduce their taxable income by a specific percentage of the acquisition value of qualifying new tangible or intangible fixed assets. The reform aims to update the list of qualifying assets and technologies and fix corresponding rates to improve legal certainty.
It introduces three categories of deductions:
1) A base deduction of 10 per cent for small and medium enterprises (SMEs) and individuals to support investments that are used in sustainable assets (20 per cent for digital assets), excluding those involving environmentally and climate-harmful substances;
2) A thematic deduction of 40 per cent (30 per cent for other companies) targeting energy efficiency, renewable energy, zero-emission transport, and supporting digital investments; and
3) A technology deduction of 13.5 per cent (20.5 per cent if spread over time) for patents and environmentally friendly R&D investments.
Additionally, the Act modifies the innovation income deduction regime, allowing taxpayers to convert non-utilized amounts into a new non-refundable tax credit available for carry forward, which helps manage the effective tax rate in line with the global minimum tax rules.
The new rules are set to be effective for investments acquired from 1 January 2025.
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Type:
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Promotion and facilitation (Investment incentives)
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Industry:
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Not industry specific (SDG)
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Not industry specific (SDG)
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Services (Electricity, gas, steam and air conditioning supply, Transportation and storage, Scientific research and development)
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