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R&D Tax Credits and Relief


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R&D

WHAT ARE RESEARCH & DEVELOPMENT TAX CREDITS AND DO I QUALIFY?

The challenge of innovation plays a key role in the growth of a modern, knowledge-based economy. The Belgian Government supports Research and Development (R&D) and innovation at both federal and regional levels using R&D tax incentives to support these activities.

 

PARTIAL EXEMPTION OF WITHHOLDING TAX

Companies can benefit from a partial exemption of 80% of withholding tax paid on wages of scientific researchers.

The definition of R&D is in line with the OECD Frascati Manual and considers fundamental research, industrial research and experimental development. Qualifying companies also include companies that have partnership agreements with specific European institutions and Young Innovative Companies.

The implementation of the withholding tax exemption requires pre-approval from the Federal Science Department. New R&D projects have to be registered by a notification procedure.

 

INCREASED INVESTMENT DEDUCTION OR R&D TAX CREDITS

Companies can deduce a percentage of the acquisition or investment value of certain assets that have been acquired or developed during the taxable period and are related to R&D. This deduction comes in addition to the annual depreciation expense of qualifying assets. The investment deduction may be calculated either as a one-shot deduction or spread over the depreciation period.

Companies have also the possibility to opt for the application of a tax credit (one-shot or spread credit) instead of the increased investment deduction. The tax credit is equal to the investment deduction multiplied by the standard corporate tax rate.

 

OUR ADDED VALUE

Leyton assists you in identifying eligible R&D activities and in preparing exhaustive supporting documentation through the whole process from scoping through document preparation, submission and controls.