In order to encourage investments in the green transition, the Belgian Government has revamped the existing investment deduction system, effective for investments made as from 1 January 2025 (see also our newsflash of 31 May 2024 and 2 April 2024).
As a recap, the new regime is organised around three ‘tracks’:
- The general investment deduction of 10% or 20% for qualifying digital investments, available only for SMEs.
- The increased “thematic” investment deduction of 40% for SMEs and 30% for non SMEs;
- The technology deduction of 13.5% (one-off) or 20.5% (spread, not possible for patents) for investments in patents and assets supporting eco-friendly R&D. Contrary to the past, these percentages are now fixed and will no longer vary yearly. In addition, the exemption of professional withholding tax for R&D should be deducted from the investment deduction base.
The Government released the lists of eligible investments in qualifying thematic and digital investments as outlined above by Royal Decree of 20 December 2024.
More in particular, the thematic investment deduction will – subject to some overall conditions and certain conditions which vary per category of investment – be applicable for investments made in one of the following categories:
- Investments relating to efficient energy consumption and renewable energy such as
heat pumps, generators, fossil fuel replacement processes, and initiatives to improve the energy efficiency of buildings; - Investments in zero-emission transportation including bicycles, speed pedelecs, motorcycles, emission-free trucks, vans, ships as well as related infrastructure and charging facilities;
- Environment-friendly investments focused on resources and waste reduction, greenhouse gas reduction and investments to promote the living environment;
- Supporting digital investments in the framework of the above-mentioned qualifying investments (for which a Royal Decree should still be published).
It is foreseen that the thematic investments lists will be updated after three years as one might expect technology evolutions.
To claim the thematic and technology investment deduction, taxpayers are required to request (an) attestation(s) at the latest 3 months after the financial year-end date (through a specific template form). The attestation (to be received within a six months period from the Government) should under the new regime be enclosed to the corporate income tax return thereby confirming that the conditions for the deduction, as outlined by the Royal Decree, have been met.
Finally, the Royal Decree also provides a list of assets for which an investment deduction can never be claimed as they are considered to be harmful for the environment and climate.
Key take aways?
Further to the publication of the Royal Decree, we propose to carefully screen the investments made/planned as from 1 January 2025 and to verify whether the renewed investment deduction can be claimed by your organisation, considering the various conditions and limitations. Specific attention should definitely be paid to the professional withholding tax reduction as well as the attestation process [mainly, the timeline and the fact that the attestation(s) should be enclosed to the corporate income tax return package].
Any further questions? Don’t hesitate to reach out to Tim Pieters, Rémi Malengreaux or your regular PwC tax contact.
