The new Belgian Federal Government Agreement for 2025-2029 introduces a number of reforms aimed at creating a resilient, innovative and sustainable economy capable of competing on the global stage while simultaneously investing in a sustainable future. In order to achieve this objective, the government will take measures aimed at stimulating innovation, circularity and reducing costs for companies.
Below are some key highlights in relation to the tax incentives stimulating research and development (R&D), and environmentally friendly investments:
- Non-utilised investment deduction may be carried-forward without any time limit.
- The regional certification requirement for the investment deduction for R&D would be removed.
- The rates for the increased “thematic” investment deduction (energy, mobility, environment) would be harmonised at 40%. In the environmental list of the thematic investment deduction, the restriction concerning European government financial support for CCS-CCU investments would be removed.
- The option of accelerated depreciation for certain investments such as investments in research and development, defense, and energy transition, would be introduced. For large companies, it would be a temporary regime where 40% of the acquisition value could be depreciated in the first year. For SMEs, there would once again be the option to apply the degressive depreciation method.
- The legislator will foresee a significant improvement in the legal certainty in terms of the partial wage withholding tax exemption for R&D.
- A covenant will be established as soon as possible between the federal administration responsible for R&D and the tax administration, with clear criteria on the manner of cooperation, ensuring loyalty between the administrations and maximizing legal certainty for taxpayers.
- Additionally, companies will have the opportunity to be recognized as research centers, thereby obtaining the certainty of a stable long-term fiscal legal framework. This recognition should be relevant for Innovation Income Deduction, R&D investment deduction / tax credit and the R&D wage withholding tax deduction, upon confirmation.
- The government will undertake a spending review of the benefits of R&D, in order to improve the output.
As indicated before, the above reflects a high level (and non-limitative) summary of the various tax incentive measures included in the federal government agreement only. Additional details regarding most of these measures can be expected in the near future (as these measures will still have to be converted into the applicable laws accordingly).
For more insights on the impact of these possible changes, please do not hesitate to reach out to Tom Wallyn or your regular PwC contact or join our webinar on 7 February 2025 (Register here).
