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The Belgian government has always had a strong focus on companies involved in R&D activities and provides support via a large number of tax incentives for employers as well as employees. Innovative income deduction: As from 1 July 2016, the new Innovation Income Deduction replaces the former Patent Income Deduction. Companies can now deduct up to 85% of their net innovation income, which may result in an effective corporate tax rate of 5 percent. Not only granted patents fall within the scope, but also copyrighted software and process innovation. The qualifying income comprises royalties, license fees (embedded in sales prices), as well as capital gains. Further to the BEPS Report on Action 5 (“Modified Nexus Approach”), the tax deduction is calculated on the net income and subject to a specific formulae.

Innovative companies play a key role in our economy. Governments worldwide have therefore foresee in multiple R&D incentives to encourage additional research and innovation by businesses. Also the Belgian government is providing its fair share and foreseeing in specific R&D incentives in the form of corporate tax credits, patent income tax exemptions, wage withholding tax reductions, government grants. etc.  

To make certain residence applications, you have to pay a contribution in advance: this is a contribution to the administrative costs of processing the application by the Immigration Department (DVZ). The fees increase from 1 January 2025. Below is an overview of the most common residence applications. Contribution: €236 (2024: €229) • residence application to study at a private educational institution • residence application as a self-employed person with a professional card or exemption • residence application for humanitarian reasons • application for a return visa Contribution: € 213 (2024: € 206) • application for family reunification as spouse or partner of a foreign national with a right of permanent residence • application for family reunification as spouse or partner of a foreign national with a fixed-term right of residence • application for family reunification as spouse, partner or non-disabled descendant who is older than eighteen years of a Belgian national who has not exercised his right to free movement • application for family reunification as father or mother of a minor Belgian child Contribution: € 198 (2024: € 192) • application for residence to return to Belgium after an absence of more than one year • application for second residence in Belgium as a long-term resident in another state of the European Union Contribution: € 245 (2024: € 237) • residence application to study at a publicly organized, recognized, or subsidized higher education institution Contribution: € 148 (2024: € 144) • residence application of a foreign national carrying out a project as a researcher with a guest agreement at recognized institution • residence application as a highly skilled worker • application for a single permit • residence application as seasonal worker • residence application of an Intra-Corporate Transferee Certain foreign nationals are exempt from the fee. In case of a change of status (e.g. a change from short-term to long-term residence), where one of the above residence applications is made, the fee must also be paid. Our specialists can assist you in determining the applicable fee or in submitting residence applications.

Since the introduction of transfer pricing documentation requirements in 2016, numerous Belgian companies are required to make their transfer pricing documentation available to the Belgian tax authorities on a yearly basis. More specifically, companies that exceed certain thresholds must prepare and submit a Master File and a Local File each year. In some cases, a Country-by-Country report or a CBC notification must also be submitted. In addition, new transfer pricing guidelines on specific topics are rapidly being introduced, such as the remuneration for the use of intellectual property and financial transactions within business groups. These guidelines can have a far-reaching impact on your transfer pricing policy and documentation.

TP documentation filing deadline is approaching! As of 2016, transfer pricing documentation obligations have been introduced in Belgium. Hence, as in many other countries, Belgian entities have to draw up and submit transfer pricing documentation when certain criteria are met. See also our previous newsletter for more information. This means, for example, that qualified Belgian entities, which are part of a multinational group, are obliged to prepare and electronically submit both a Master file and a Local File.