Since the introduction of the notional interest deduction and the patent income deduction, Belgium has increased its attractiveness as a prime location for companies involved in R&D activities and in the exploitation of patents. Belgium offers a full range of tax incentives enabling companies to structure their R&D activities, as well as the valorization of the intellectual property resulting from R&D activities, in a tax efficient way. This comprehensive R&D regime consists of tax deductions on qualifying IP income, deductions on R&D investments and (refundable) tax credits, cash savings on payroll cost of researchers and full tax exemption of R&D subsidies. A new tax regime for R&D called“Deduction for Innovation Income” is about to be enacted. This will have a broader application then patents, while meeting the concerns of OECD and EU as laid down in the so-called “Modified Nexus Approach”.
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