5 July 2023

In the dynamic world of research and development (R&D), it is important to stay informed about changes in laws and regulations. Circular 2023/C/49 brings important news regarding the registration requirements for the exemption of the withholding tax payment for researchers in R&D projects. Starting from August 1 2023, a change in tax administration requires projects to be reported to the Belgian Science Policy Office (BELSPO) before their commencement to qualify for the incentive. 

Understanding Belspo and the importance of project notification 

BELSPO plays a crucial role in promoting and financing scientific research and innovation in Belgium. To ensure transparency and compliance, the Court of Cassation made a groundbreaking ruling on January 6 2023, emphasizing the need to notify R&D projects and programs to BELSPO before their launch. This ruling introduces a stricter interpretation of the notification requirement, stating that R&D projects and programs must be registered before their commencement. 

  • Reason for the change: The Court of Cassation adopted a stricter position on 06/01/2023, stating that registration must take place before the start date of the projects or programs. It is now mandatory to mention the expected start date during registration. 

Transition period and important deadlines 

To facilitate a smooth transition, a flexible interpretation (before the Court of Cassation’s ruling) will be maintained during a designated transition period. However, starting from August 1 2023, project and program notifications must be submitted before their execution. It is important to distinguish between notifications before and after this date. 

Notifications before 1 August 2023 – previous procedure 

During this period, the notification date determines when the exemption can be applied. For example, a project or program that started in January 2023 and is notified in May 2023 can still benefit from the withholding tax exemption starting from May 2023. 

Previously, project or program registration could be done: 

  • Before the start of the project 
  • Before the period for which the exemption applies 
  • Before the effective application of the exemption 

Notifications After 1 August 2023 – new procedure 

From August 1 2023, only R&D projects and programs that have been timely notified can claim the exemption from withholding tax. This means that a project or program starting in August 2023 but only notified in September 2023 will not be eligible for the exemption. 

According to the new procedure, all projects already in progress must be registered before August 1. For example, if a project started on May 1 and has not been registered yet, it is essential to register it as soon as possible before August 1 to benefit from the withholding tax exemption. 

For projects starting from August 1, it is mandatory to register them before their commencement. Failure to register a project that has already started means the exemption cannot be applied. 

Importance of timely notification and expert advice 

Given these changes, it is crucial to inform FI Group in a timely manner about new R&D projects and programs starting from August 1 2023, or thereafter. Failure to notify on time will result in the inability to claim the withholding tax exemption. 

Information required for project registration 

When completing the project registration, the following information must be provided: 

  • Identification of the person responsible for the withholding tax 
  • Description of the project or program, specifying whether it is fundamental research, industrial research, or experimental development 
  • Expected start date of the project or program 
  • Expected end date of the project or program 

Retrospective changes and adjustments 

Certain information can be retrospectively changed or adjusted during the project’s course. This includes data regarding research personnel and the planned end date of the project. 

At FI Group, we are committed to keeping our clients informed and ensuring a smooth transition in light of these new requirements. Feel free to contact us if you have any questions or need assistance with project registration or any other aspect of R&D financing and support. 

With FI Group as your reliable partner, you can navigate the evolving landscape of R&D funding and fully leverage the available incentive measures. 

Yvette Poumpalova 

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