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Tax advantage for innovation in Belgium

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Belgium has a few separate tax schemes that apply to acquired IP rights. For instance, the innovation allowance for innovation income. This means that 85% of the net income ensuing from IP rights is exempt from corporate income tax. The innovation allowance has been in place since 2020 and applies to IP rights acquired as of 1 July 2016.

Belgium furthermore has the so-called tax credit. In contrast to the innovation allowance, which is applied as a deduction from the taxable results, the tax credit is a tax reduction on the amount of corporate income tax owed.

Both domestic and foreign corporations having a fixed place of business in Belgium are eligible for the innovation allowance, or as the case may be, the tax credit.

For more information about both Belgian schemes, visit www.vlaio.be, the website of Agentschap Innoveren & Ondernemen (VLAIO), the Flemish government’s first point of contact for all entrepreneurs in Flanders.

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