An increased investment deduction is available for investments made by a Belgian company into newly acquired or built tangible fixed assets or into new intangible fixed assets, provided that these assets are being used in Belgium for the purpose of a professional activity. The increased investment deduction will also be provided with respect to investments made in “energy saving assets,” that is, fixed assets used for a more rational approach to energy consumption, for the improvement of industrial processes from an energy-based point of view, and especially for the recovery of energy in the industry.
A percentage of the acquisition or investment value of energy saving assets that have been newly acquired or established during the taxable period will be tax deductible. This comes in addition to the accounting depreciations that are also tax deductible.
The increased investment deduction should therefore be applied as a one-off deduction and equals 13.5 percent (indexed yearly — percentage investments 2015) of the acquisition value or investment value.
The increased investment deduction will be applied on the profits of the taxable period in which the assets have been newly acquired or established (that is, when they became depreciable). When the deduction cannot be fully set off against the profits of the taxable period, the proportion of the deduction that has not been used can be carried forward without any time limit and can be set off against the profits of the subsequent taxable periods. The application of the carried-forward increased investment deduction is however limited to a certain amount per taxable period, being EUR620,000 for investments made in 2014, or 25 percent of the total amount of carried forward increased investment deduction if this amount is higher than EUR2.48 million (per financial year 2014).
The Royal Decree implementing the Belgian Income Tax Code contains a list of eligible investments. Some examples are wind turbines, solar panels, combined heat and power plants, biomass and waste handling, processing installations or heat recovery devices.
A certificate issued by the competent Regional Authority confirming that the assets are enlisted should be requested within three months following the last day of the taxable period in which the assets are acquired or established.
To verify the authenticity of the investment made, it is necessary that the application to the competent Regional Authority is accompanied with supporting documents and other items for determining the accuracy of the amount and the value of the investments.
In Belgium, renewable energy is a regional matter; only offshore wind power and hydro power are governed by national (federal) regulations. Depending on the competent Regional Authority, applications can be made for specific support schemes.
Financial support to encourage Belgian companies to invest in state-of-the-art, ecological technologies can be obtained via an open online system and will be granted by the competent Regional Authorities.
Provided that certain conditions have been met, these regionally granted subsidies are tax-free for corporate income tax purposes.
In Belgium, electricity from renewable sources is promoted mainly through a quota system based on the trade of certificates — in other words, green energy certificates and/or combined heat and power (CHP) certificates.
The certificate can be considered as a transferable intangible asset, demonstrating that the energy plant as mentioned realized a certain amount of energy savings. The competent Regional Authorities grants these certificates on a monthly basis to the owners of such energy plants as a reward for the energy savings they achieved.
Belgian electricity suppliers have to make sure that a minimum amount of the electricity they provide to the end consumers can be considered as green or renewable energy. To demonstrate that they have reached this minimum amount of renewable energy, the electricity suppliers need to submit a sufficient number of certificates to the Regional Authority. Electricity suppliers who do not produce renewable energy themselves (and have not been granted certificates) or suppliers that do not provide enough renewable energy themselves are able to buy these certificates on the market.
Producers of renewable energy can sell the certificates they have received to an electricity supplier who needs to reach the minimum amount of renewable energy. Moreover, to ensure the sale of certificates at a minimum value, the distribution network operator, as part of its duty as a public service, will also purchase certificates at a minimum guaranteed value, upon request of an energy producer.
As a result, producers of renewable energy can use the certificates that were granted to them by the competent Regional Authority to: