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Tax alert
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Belgian Patent Income Deduction: Tax Authorities issue an up-dated FAQ list revealing a business oriented approach

The patent income deduction (PID) is a tax incentive introduced in 2007 which aims at supporting R&D related activities in Belgium. It allows a Belgian company or a Belgian Permanent Establishment (“PE”) of a foreign company to deduct an amount equal to 80% of the qualifying gross patent income from its taxable basis.
As a result, the effective tax rate on such income varies between 0% and maximum 6.8% (i.e. 20% of the Belgian statutory rate of 34%) since the gross income approach allows for a deduction at full tax rate of the related costs. In addition, the PID can be combined with the application of other deductions (e.g. Belgian Notional Interest Deduction, general interest deduction, R&D credit or deductions).

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10-08-2009
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Werner Huygen
partner
32 2 774 94 04
werner.huygen@be.ey.com

Herwig Joosten
partner
32 2 774 93 49
herwig.joosten@be.ey.com

Steven Claes
partner
32 2 774 94 20
steven.claes@be.ey.com

Kurt Van der Voorde
partner
32 2 774 92 81
kurt.van.der.voorde@be.ey.com
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