Year-end actions relating to R&D incentives

In the context of the approaching year-end, we want to draw your attention to some of the Belgian R&D incentives which may require your attention:

Exemption for payment of professional withholding (WHT) tax for R&D – BELSPO notification

The tax audits with regard to the exemption of professional WHT for researchers are becoming more and more frequent and especially much stricter. Consequently it is very important to pay sufficient attention to the information included in the online platform. As the tax authorities sometimes take a very formalistic approach, the start and end date of the project/program always need to be completed. In case a project/programs takes more than a year, BELSPO advises to take a copy each year and update the dates. In this context, we would recommend to review the BELSPO filing in view of the upcoming year (especially the description of the project/program should be comprehensive) and, if not yet done, update the underlying R&D documentation package for 2020.

The end of the Patent Income Deduction (PID) – conversion to Innovation Income Deduction (IID)

From 30 June 2021 onwards, companies will no longer be able to apply the PID. Consequently, if you are still making use of this deduction under the grandfathering regime, it is important to determine the impact of the transition to IID. Even though under the IID regime, the tax deduction is only based on the net innovation income after application of the so-called nexus fraction, the regime also offers opportunities compared to the PID. Also, the first rulings on the IID are coming to expire (as are the more recent 3 year rulings for software companies) so also here, we recommend to review your situation proactively.

Deadline prefiling IID-rulings

Please note that the Ruling Commission has announced that all prefiling requests with regard to the Innovation Income Deduction with respect to financial year 2020, need to be filed no later than January 31, 2021, to ensure the ruling will be obtained before the filing deadline of the corporate income tax return.

Deadline request attestations Investment deduction

Please keep in mind that the deadline to request the attestations for the investment deduction and the R&D tax credit is March 31, 2021 for the Brussels and Walloon region. With regard to the Flemish region, the deadline for the investment deduction is in principle also March 31, 2021. For investments in R&D the deadline is in principle the same as the deadline for filing the tax returns. However, we strongly advise not to wait until the last moment to request these attestations!

If you have any questions or if you want us to check your file, please do not hesitate to contact us.