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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.

The tax authorities announce new audits on companies using exemptions from wage withholding tax payments in 2023. To support certain sectors, the law provides for so-called ‘wage withholding tax discounts’. Think, for example, of the discount for overtime, scientific research or shift work incl. works in immovable state. The employer is exempted from paying (part of) the wage withholding tax to the Treasury. Since this amount is retained in the company, this directly provides more cash assets. In this round of audits, the focus is on the exemption for night work and shift work incl. works in immovable state. Last year, this courtesy measure underwent major changes . Anyone applying for one or more exemptions will initially receive a letter from the tax authorities warning them of the extra audits. In this way, the tax authorities urge you to first check yourself whether you meet all the conditions of the exemption. Did you apply the exemption incorrectly? Then you can make a spontaneous correction in the wage withholding tax declarations. However, bear in mind that you may owe 4% late payment interest (on an annual basis) if you have to repay unjustified exemptions. Moreover, should the tax authorities discover during an audit that you did not qualify for the exemption, you risk a tax increase of 10% up to 200%. A thorough evaluation of the exemptions applied in your company is therefore important. Would you like the help of our specialists in this regard? We are at your service!

Virtually all employers are experiencing the shortage on the European labour market and are looking for solutions to attract talent from outside European borders as well as flexibly deploy them on Belgian projects. However, employees who are not citizens of the European Economic Area (“EEA”) or Switzerland (hereafter “third-country nationals”) cannot be employed in Belgium just like that. In principle, they need a permit to work and reside in our country. In some cases, however, the (often) complex procedure to obtain such a permit does not have to be followed. This is the case, for example, for third-country nationals employed by a company based in the European Union who are temporarily posted to Belgium for a specific project as part of their employment. This exception is sometimes popularly referred to as the “Vander Elst exemption”.  

The holidays have just ended and with them comes the first quarter. What does this mean for your payroll administration? We have already listed the particulars.    

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.    

Qualifying Belgian group entities which are member of an international group should take into account the upcoming deadline of 31st December 2018 for electronic filing of the Belgian Master File form ‘275MF’ as well as the Country-by-country reporting (275 CBC NOT and/or 275 CBC).

Belgium is introducing the obligation to send and receive structured electronic invoices as of 1 January 2026. If you are not established in Belgium but you do business in Belgium, the question arises whether this change will also affect your company? We looked into it for you.