Investment deduction

Technology deduction

Under the new law, the investment deduction for environment-friendly investments in R&D and patents will be renamed as technology deduction. The qualifying investments under this deduction remain as follows:

• Patents.
• Fixed assets used to promote research and development of new products and advanced technologies that have no impact on the environment or aim to minimize the negative impact on the environment of existing products and technologies as much as possible.

The percentages for the technology deduction are fixed at 13.5% for the one-off deduction and 20.5% for the spread deduction. There is also still the possibility to opt for a tax credit calculated at 25% of the amount of the investment deduction. Recently, the R&D tax credit regime was updated in view of the global minimum tax rules and made refundable after four years already (instead of five in the past). 

When applying the investment deduction to the activated wages of researchers within the R&D framework, it is important to check how it interacts with the wage withholding tax exemption for R&D. Note that when wages which benefit from the (partial) wage withholding tax exemption are included in the acquisition value of assets, the exempt amount may not be included in the calculation basis of the investment deduction, which eliminates the possibility of double deduction. This principle was already applied in the context of the R&D tax credit and is now extended to all categories of investment deduction in the new law. For more information on the (partial) wage withholding tax exemption and the guidelines recently published by BELSPO, we refer to our article regarding an update on the R&D wage withholding tax exemption.