Tax breaks for innovation in software?


New fiscal innovation deduction includes innovation in software: tell your tax department!


The Government has decided to include innovation in software in the new innovation deduction, replacing the patent income deduction. Beltug applauds this decision, which offers important benefits not only for the ICT sector, but also for other companies investing in innovative software. Furthermore, this decision will not only include software that is licensed commercially, but also software that is used internally. Beltug has been working closely together with EY to prepare our position to the Government.


"The purpose of the new innovation deduction is to boost Belgian competitiveness while complying with the requirements of the OECD. The new regime not only applies to patents, but also to other intellectual property, including copyright protected software. The income qualifying for the incentive will also include capital gains. The deduction rate is increased to 85% of the net qualifying IP income, for an effective tax rate of 5,10%. The requirement of development or improvement of the IP assets in a qualifying R&D center is abolished and replaced by the so-called “nexus ratio” which was imposed by the OECD." (source EY)


EY has included key details on the deduction on their website.

You can also read the regulation itself (in French and Dutch).

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