Understanding how tax incentives work and which ones are available for you to empower you to take greater control of your finances. FI Group explains 5 types of fiscal incentives to help you align your fiscal strategies and reach your financial goals.
Who has to pay tax in Belgium?
All commercial companies in Belgium are subject to corporation tax. Legal mechanisms make it possible to lower the nominal rate. Various tax incentives for individuals and companies make Belgium one of the most attractive places to locate and do business.
Some Belgian taxes are collected and charged at regional level, while others are managed by individual municipalities.
What are tax incentives about?
Your taxable income is the income left after deductions for the likes of social security contributions, personal allowance, and professional costs.
Belgian private companies and public institutions can profit from several tax incentives and fiscal schemes. These affect both the taxable income and tax return.
FI Group Belgium consists of a team of expert consultants ready to guide you through the five different tax incentives we can support you with:
1.- Partial wage withholding tax exemption for researchers
Within this national tax incentive, up to 80% of the withholding tax on professional income can be recovered by a company. Within this enterprise tool, the following needs to be considered:
This exemption can apply to:
2.- Increased investment deduction
The investment deduction reduces the amount on which tax must be paid. The amount of the deduction is determined by the percentage of the investment.
The Corona III law increased the basic rate of the investment deduction from 8 % to 25 % for investments made between March 12th 2020 and December 31st 2020. This measure is from now on extended for investments carried out till December 31st 2022.
Intended to encourage enterprises to make investments in Belgium, this national incentive is mainly for eco-friendly investments in R&D or for energy-saving investments.
The investments should apply to:
The investment deduction is applied to the profits or benefits of the tax period in which you acquired or achieved the aforementioned fixed assets.
3.- Innovation income deduction (IPBox)
To reduce the revenue amount on which tax must be paid, intellectual property rights reduce the enterprise’s taxable basis. These can be acquired through patented products, developed software, plant variety rights, …
Via the innovation income deduction, the net income from several intellectual property rights can be deducted for 85% from corporation tax. The innovation income deduction applies to the following IP rights:
The deduction applies to self-developed IP rights as well as IP rights acquired or licensed from related or unrelated third parties. Marketing intangibles, such as trademarks, are excluded.
4.- Cadastral income reduction and Property tax reduction
Industrial taxes are also related to the cadastral assets of a company (building and machinery). The service provided is to review the taxable basis to optimize (and reduce), based on the analysis of the enterprise’s assets and use.
5.- Copyrights regime
If a taxpayer receives income from the assignment or the concession of copyright and related rights, these are in principle taxable as movable income.
To further encourage you to invest in R&D+I, our FI Group consultants help identify, implement and maintain the necessary financial processes. We support you in understanding and intercepting the available R&D+I opportunities.