Corporate income tax alert

1. Reform of Belgian Investment Deduction
The Belgian Investment Deduction reform aims to:

  • Modernize the list of investments eligible for this regime after 40 years.
  • Align with sustainable development needs.
  • Establish fixed percentages and simplify procedures.

The new system is set to commence as from 1 January 2025, but is still subject to legislative approval.
The new system comprises three tracks:

The table below provides an overview of the current system of qualifying investments and the percentages for the fiscal years 2022, 2023, and 2024.

Small and medium-sized companies (SME’s) (1)

2022

2023

2024 (2)

Ordinary investment deduction - one-off

25%

8%

8%

Digital investments - one-off

13,50%

20,50%

15,50%

Security - one-time

20,50%

27,50%

22,50%

(1) also applicable to self-employed individuals
(2) expected percentage for fiscal year 2024 (tax year 2025). To be confirmed via publication in the Belgian Gazette.

All companies

2022

2023

2024 (2)

Environmentally-friendly investments in R&D - one-off

13,50%

20,50%

15,50%

Environmentally-friendly investments in R&D - staggered

20,50%

27,50%

22,50%

Patents - one-off

13,50%

20,50%

15,50%

Energy-saving investments - one-off

13,50%

20,50%

15,50%

Fume extraction or ventilation systems - one-off

13,50%

20,50%

15,50%

Greening of trucks and refuelling infrastructure - one-off

35%

42% / 36,50%

31,50%

Reusable packaging - one-time

3%

3%

3%

Companies exclusively active in maritime shipping

2022

2023

2024

Sea-going vessels - one-off

30%

30%

30%

The table below provides an overview of the “tracks” and the percentages that would apply as from 2025.

New investment deduction from 01/01/2025

SME's (3)

Other companies

General track: basic deduction - one-time

10%

-

General track: digital investments - one-time

20%

-

Thematic deductions - one-time

40%

30%

Technology deduction for R&D and patents - one-time

13,50%

13,50%

Technology deduction for R&D - spread out

20,50%

20,50%

Ships - one-time

30%

30%

(3) also applicable to self-employed individuals

1) General track for small and medium-sized companies (SME’s):

  • Basic deduction increased from 8% to 10% exclusively for SMEs
  • Simplified application process without formal requirements
  • Excludes assets with harmful environmental impact unless no alternative is available
  • Additional 10% deduction for digital investments by small and medium-sized companies
  • The eligible investments include software and equipment supporting digital payment and invoicing systems, digital accounting systems, digital CRM systems, digital e-commerce platform systems, and digital systems for securing information and communication technology. The specific nature and technical features of the qualifying investments will be defined by royal decree.
  • Annex 275U should be added to the corporate income tax return

2) Targeted track: thematic deductions: 

  • Offers higher deductions for specific investments and technologies
  • Applicable to all companies with a 40% deduction for small and medium-sized companies and 30% for others
  • Categories include energy efficiency, renewable energy, zero-emission transportation, and digital investments aligned with these themes

3) Transformation of research and development investment allowance:

  • Introduction of Technology Deduction offering a 13,50% deduction for qualifying R&D investments and patents
  • Increased to 20,50% if deduction is spread over time, excluding investments in patents
  • Option for taxpayers to opt for a tax credit

Implementation:

  • Expected as from 1 January 2025
  • Details to be determined by Royal Decree, influencing Belgium’s investment landscape

Example : Investment in zero-emission truck ad 60.000 EUR, depreciated over 10 years

Thematic investment deduction (one-off)

Company A

Company B

Revenue

150.000

150.000

Depreciation zero-emission truck

-6.000

0

Taxable profit

144.000

150.000

Investment deduction (30%)

-18.000

0

Taxable base

126.000

150.000

Corporate income tax

31.500

37.500

Consider the following scenario: Company A and Company B, both large companies, generate both a revenue of 150 KEUR during the year 2025. However, Company A makes a strategic decision to invest 60 KEUR in a zero-emission truck, whereas Company B does not pursue the same investment opportunity.

Company A benefits from a thematic (one-time) investment deduction of 30% due to its investment in the zero-emissions truck. As a result, Company A’s taxable base decreases to 126 KEUR after deducting the 18 KEUR investment deduction. As a result Company A would be liable to a corporate income tax of 31,5 KEUR.

On the other hand, Company B chooses not to utilize the investment deduction. Therefore, its entire profit becomes taxable. Assuming that no additional costs are present, this would result in a corporate income tax liability of 37,5 KEUR.

The decision to invest in a zero-emission truck at 60 KEUR results in a decreased taxable basis for Company A, attributed to the additional annual depreciation of 6 KEUR and the one-time investment deduction of 18 KEUR. Consequently, leading to a net tax saving of 6 KEUR for Company A.

2. 120% deductibility for E-invoicing costs

  • Costs for e-invoicing are 120% deductible for small and medium-sized companies starting from 1 January 2024.
  • The law of 6 February 2024, obliges electronic invoicing between VAT-registered businesses from 1 January 2026.
  • Eligible investments for the enhanced 120% deduction include billing software enabling structured electronic invoicing, periodic subscription fees for such software and consultancy costs related to compliance with these obligations.
  • It only concerns direct costs related to preparing for compliance with electronic invoicing obligations
  • Costs that are capitalized and depreciated are not eligible for the enhanced deduction.

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Corporate income tax alert

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