The Belgian government passed a draft law to overhaul the investment deduction system. Effective 1 January 2025, the reforms pertain to tax deductions for investments, which are categorized into three groups. The standard amortization for tax purposes will remain unchanged. The three investment groups are as follows:
- The general category offers a basic deduction of 10% for small and medium enterprises (SMEs) and eligible individuals. This benefit is increased to 20% for investments in qualifying digital assets. This proposal intends to substitute the 8% ordinary investment deduction available to such taxpayers.
- The “thematic” deductions category offers a 40% reduction for SMEs and individuals. The deductions for other companies is set at 30%. This incentive targets investments in renewable energy sources, carbon emission-free transportation, and digital investments.
- The technology deduction category offers tax deductions at 13.5%, with an additional spread deduction of 20.5% for patents and eco-friendly research and development (R&D) investments. This new structure is set to replace the existing 15.5% deduction alongside a 22.5% spread deduction for similar investments.
The Belgian Parliament is expected to pass the legislation in the following weeks.
