Belgian Patent Box

Belgian Patent Box also known as Innovation Income Deduction is a tax relief scheme for innovative companies in Belgium.
Corporation tax on profits from a company’s own innovations are reduced by up to 85%.

We all innovate!

Companies innovate. Products and processes are improved and services become more efficient. These innovations can be protected by applying for patents.

In order to encourage innovative companies, the Belgian government offers them an income deduction through innovation. To benefit from this, innovative companies have to protect their R&D results. One way of doing this is through patents. Applying for Belgian Patent Box will reduce the tax burden. The profits from these protected innovations will be taxed at only 5.1%.

before

Venootschapsbelasting (voor)

after

Venootschapsbelasting (na)

The innovation-related profit from innovative products and services is deducted from their taxable basis, thus leading to a reduction in corporation tax. Besides patents that have already been granted, the Belgian Patent Box also applies to patent applications as soon as they are filed, plant breeders’ rights and innovative software.

The patent protection of innovative products and services will be handled by specialists in patent applications who are technically and legally qualified.

What is the Belgian Patent Box?

Belgian Patent Box results in a tax deduction: how much you can deduct will depend on how innovative your company is. In order to be able to calculate the Belgian Patent Box, you must first determine your income from innovative products and services. The value of your innovation is calculated on that income (the ‘innovation-related profit’). This profit is the basis for the Belgian Patent Box that is deducted from the taxable profit of your company.

The more innovative your company, the greater the Belgian Patent Box will be. In other words, this measure is a stimulus for Belgian companies with an R&D department of their own to innovate even more and protect their innovations.

What is the Belgian Patent Box?

To benefit from Belgian Patent Box your own innovations must be identified and protected. The main way of obtaining this protection is by filing one or more patents. Innovative companies in the software and service sectors can also apply for patents to protect their improvements. The challenge is to detect these innovations within your company. Our experience has shown that many innovative companies have products, systems and/or processes that are eligible for patents. It is best to work with a patent specialist who will help you detect these innovations and convert them into patents.

Brantsandpatents has already assisted over 100 companies in applying for Belgian Patent Box. Brandsandpatents has also worked with tax advisors to assist many companies in obtaining an ‘advance ruling’. An advance ruling (sometimes referred to as a prior decision) determines the extent of Belgian Patent Box in advance, in consultation with the FPS Finance. Such rulings are not mandatory but will provide your company with more certainty about the level of Belgian Patent Box, for a period of 5 years.

How can we obtain an income deduction through innovation?

Most companies – and definitely companies that have their own R&D department – own a lot of innovations but fail to ‘protect’ them adequately. A Patent Attorney is trained to detect and register these innovations.

undetected innovations detected innovations Detectie
Registratie Optimalisatie

Your innovations are evaluated by scanning the current and future activities of your company. Then it will be possible to assess which innovations can be protected by patents or plant breeders’ rights and innovative software. In other words, the aim is to find ‘diamonds in the rough’ within your company, dig them out and turn them into polished gemstones.

How do we calculate the income deduction?

The Belgian Patent Box is deducted from the taxable basis. It is deducted after the definitively taxed income deduction and before the notional interest deduction, the deduction of previous losses and the investment deduction.

How do we calculate the income deduction?

Belgian Patent Box

Belgian Patent Box is a measure that exists to protect innovative companies. Intellectual Property Rights must be established in order to benefit from the measure. These Intellectual Property Rights are pending or granted patent rights, plant breeders’ rights and innovative software. Your company should preferably be the owner of these rights. However, you can also benefit from Belgian Patent Box as a co-owner, usufructuary or licensee. With respect to patents, you can apply the deduction as soon as the patent application has been filed. The Belgian Patent Box can be carried forward to subsequent years. These are important changes that did not exist in the old patent income deduction system.

Innovation-related profit on innovation

To begin with, the innovation-related profit for your innovative products and/or services has to be calculated on the basis of your turnover derived from innovations. The innovation-related profit is equal to the added value of your innovative service or innovative product in comparison to a similar service or product that does not implement your innovative concept. This is usually between 3 - 15% of your turnover from innovations.

To determine this innovation-related profit (the aforementioned 3 - 15%), the ‘transfer pricing’ principles as described in the international OECD guidelines are used.

Your own research costs

The costs of your own R&D activities have to be calculated. A “track and trace” system will be essential to identify the various R&D costs for all your innovations. The R&D costs are deducted from the calculated patent-related profit.

Nexus factor

Subsequently, this difference is multiplied by a Nexus factor. Intensive R&D companies that also thoroughly protect their innovations will have a Nexus factor of approximately 1.

In order to calculate the Belgian Patent Box, 85% of the net innovation-related income is multiplied by the Nexus fraction, which can be increased by 30% to a maximum figure of 1.

Nexusfactor

The Nexus fraction is a fraction with the qualifying R&D costs in the numerator and the global R&D costs related to the Intellectual Property Rights in the denominator. The goal is to optimise your own R&D efforts so that the qualifying R&D costs are high in comparison to the global R&D costs.

For companies that do all their own R&D and file patents for all their R&D innovations, the Nexus fraction equals a maximum of 1. Even if a company does not do all its own R&D, but it has a Nexus fraction of at least 0.77, this fraction can still be increased to 1. In all other cases, the Nexus factor is equal to (Nexus fraction x 1.3).

Belgian Patent Box: how it works in practice

In practice, it will be important for companies to use a track & trace system to track their own R&D costs: this means identifying the R&D costs for the different innovations being able to provide proof to support them. The costs we are talking about here are those for R&D that lead directly to the acquisition of innovation rights. R&D costs outsourced to external, unrelated companies are also eligible for Belgian Patent Box.

However, R&D costs incurred by related companies, as well as the costs of acquiring Intellectual Property Rights, are not included. The proportion of these R&D costs is reflected in the Nexus fraction. The Nexus fraction is automatically increased by 30%, but the result is not allowed to be more than 1. This increase is to ensure that companies are not excessively penalised for outsourcing research and development to related companies or for acquiring Intellectual Property Rights.

The R&D costs are deducted from the patent-related profit. The patent-related profit for your innovative products and services tends to be about 3 to 15% of the turnover for innovations. The turnover for innovations is the proportion of the total turnover under patents that have been filed or granted and for innovative copyrighted software. At innovative companies, the turnover for innovation tends to be 60% to 90% of the total turnover.

85% of the difference between the R&D costs and the patent-related profit is eligible, and that final amount can be deducted from the taxable turnover. Taxable companies have the opportunity to spread the deduction of the costs for innovation income in previous financial years over a maximum of seven tax periods.

7 steps of the Belgian Patent Box: how it works in practice

Clearly the actual calculation of your Belgian Patent Box will be made in close collaboration with your tax advisor ** and Brantsandpatents*.

However, the following 7 steps provide you with a guideline to estimate your Belgian Patent Box.

Nexusfactor
  • Step 1: Determine* what patent rights or copyrights are available for your product and/or service.
  • Step 2: Calculate the total turnover for this protected product and/or service.
  • Step 3: Calculate the company’s own R&D costs for innovation, i.e. the costs incurred in developing this protected product and/or service.
  • Step 4: Calculate the turnover for this product and/or service.
  • Step 5: Determine** the added value of the innovation, which is usually between 3 and 15%. The transfer pricing methodology is to be used to calculate this value.
  • Step 6: If the company does not do all its own R&D, determine the ** Nexus factor. If the company does do all its own R&D, the Nexus factor will always be 1.
  • Step 7: Now calculate the Belgian Patent Box = [(Step 4 x Step 5) – (Step 3)] X 0.85 X Nexus factor

Repeat steps 1-7 if necessary for each of your innovative products and/or services.

The overall Belgian Patent Box will then be the sum of all the innovative products and/or innovative services.

What is new about the legislation?

  • Your company can benefit from Belgian Patent Box as soon as the patent application has been filed and no longer needs to wait until the patent is granted.
  • The unused innovation income innovation is also transferable to a subsequent tax period.
  • There is a transition period until 30 June 2021 to allow the effects of the old patent income deduction system to run their course.
  • Besides patents and patent applications, the Belgian Patent Box also applies to breeders’ rights, innovative software and to medicines and plant protection products under data exclusivity.

Johan Brants

Johan Brants has over 20 years of experience in Intellectual Property and patents in particular. He was a professor at Ghent University and Vrije Universiteit Brussels for more than 15 years and still gives guest lectures at numerous universities and company schools in Belgium and the Netherlands (including Vlerick, AMS and AOG). Johan Brants is also a partner at Brantsandpatents with offices in Ghent and Brussels.

The firm Brantsandpatents has considerable experience with the old patent income deduction system and the new Belgian Patent Box, in various technical fields. It achieves this by developing and valorising patent strategies.

About Brantsandpatents

At Brantsandpatents we have specialised in advice and strategy relating to Belgian Patent Box for many years. In close cooperation with your company, we develop a tax-friendly patent strategy. The technical team at Brantsandpatents consists of twenty engineers and/or doctors of sciences. Moreover, they are all legally qualified to detect your innovations, turn them into patents and maximize your tax advantage.

FAQ

  • Will the patent income deduction continue to exist?

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    Although the patent income deduction in its current form will soon disappear, a similar scheme will continue to exist, albeit in an adjusted form. The name of the new system is Belgian Patent Box, which covers more than just income from patents.

  • What is Belgian Patent Box?

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    Belgian Patent Box is an extension of the former patent income deduction system. The intention is to support new or additional R&D activities.

  • Can Belgian Patent Box also be applied to purchased Intellectual Property Rights?

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    Belgian Patent Box can indeed be applied to Intellectual Property Rights that you have purchased. Clearly the costs of acquiring Intellectual Property Rights are deducted from the gross income.
  • When can I start deducting my patent rights?

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    In contrast to the old system, in which the deduction could only be applied when patents had already been granted, deduction is now possible starting in the year when a patent application is filed. This can be done in the form of a temporary exemption, with the income only partly being considered as profit. The condition for this, however, is that a granted patent must ultimately be obtained, or in other words, if the Intellectual Property Rights are not obtained, the previously exempt profit must be considered taxable profit.

  • What counts as innovation income?

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    This means income related to the qualifying Intellectual Property Rights (see ‘Can Belgian Patent Box also be applied to purchased Intellectual Property Rights?’). In theory, this income is calculated separately for each Intellectual Property Right, but if this is impossible, the innovation income can also be calculated for each type of product or service or each group of products and services. The payments obtained in this context must always be standard market prices (‘at arm’s length’), i.e. they may not amount to more than the payment that would be agreed between independent parties.


    The income that counts here consists of: licence payments, income from Intellectual Property Rights included in the sale price of the protected product/service (also called ‘included royalty’), income from Intellectual Property Rights resulting from process innovations and compensation for damages resulting from the infringement of an Intellectual Property Right. Furthermore, the amount obtained from the sale of an Intellectual Property Right purchased in the last financial year or no earlier than a point in the last 24 months can also be included in the innovation income.


    In other words, the rule is that innovation income can only be considered where it belongs to the taxable result of a Belgian company or institution. This means that the income allocated to a foreign permanent establishment is not counted for Belgian Patent Box.

  • On what basis is Belgian Patent Box calculated?

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    Whereas gross income was the basis for calculating the old patent income deduction, the Belgian Patent Box will now be calculated on the basis of net income. Thus income linked to a given Intellectual Property Right in a given year must be reduced by the R&D costs linked to that Intellectual Property Right, which are tax-deductible.

  • Can the deduction be transferred?

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    It is possible to transfer the deduction for a tax period that was not used, because there was too little profit, to a subsequent tax period or periods. A system of fiscal continuity is provided here for mergers, splits and equivalent activities.

  • What does ‘BEPS’ stand for?

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    BEPS is the abbreviation for ‘Base Erosion and Profit Shifting’, an OECD action plan that aims to fight the ‘disappearance’ or ‘artificial movement’ of company profits with a view to tax optimisation. The goal is to prevent companies from shifting profits from a country with high taxes to a country with a beneficial tax system such as ‘patent boxes’ without any significant activities taking place in that country. This guideline is the reason for the adapted Nexus approach.

  • What is Nexus?

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    Nexus means the following fraction:


    qualifying R&D costs (A + B) global R&D costs (A + B + C + D)

    • A: direct R&D costs incurred by the company itself
    • B: R&D costs incurred by unrelated companies
    • C: R&D costs incurred by related companies
    • D: Costs of acquiring the Intellectual Property Rights

    The result of the fraction can never be greater than 1.

  • What are qualifying costs?

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    These are the R&D costs that relate directly to intelligent property rights. These costs must be either made or borne by the company itself, or by an unrelated company, or a related company in the case of payments for costs charged through to a related company without adding a profit margin (known as ‘disbursements’).

  • What is the increase for?

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    The factor of 1.3 by which the qualifying costs are multiplied results in an increase of 30%. This is an element that ensures there is no substantial disadvantage suffered by companies that do further work on an Intellectual Property Right they have purchased or outsource (limited) R&D activities to a related company. The maximum amount of this increase is limited to the amount of the global costs.

  • What are the global costs?

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    The global costs include the qualifying costs, the costs of purchasing Intellectual Property Rights and the costs of R&D activities carried out by a related company.


    If the fraction results in a fundamentally inaccurate representation of reality, the company is entitled to request an ‘advance ruling’ or prior decision. The requirement for this is that the fraction is at least 25% before the increase is applied.


    Furthermore, the company must also demonstrate its exceptional circumstances annually, which prove that the fraction does not correspond to the added value of the R&D activities carried out by the company itself.

  • Is it possible to apply an exception to the modified Nexus fraction?

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    In all cases, the qualifying and global costs through the years must be cumulated so that they reflect the correct relationship at all times between the R&D activities the company carries out itself and those that are outsourced.

  • What is the deduction percentage?

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    According to the new system, companies can benefit from as much as 85% deduction of innovation income, as opposed to a mere 80% under the old patent income deduction. The calculation multiplies the modified Nexus fraction (qualifying costs + 30% divided by the global costs) by 85% of the net innovation income.


    (Qualifying costs x 1.3) / Global costs x net innovation income x 85% = Belgian Patent Box).

  • Are there any special administrative requirements?

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    The new law means that a company will have to keep a considerable amount of documentation to provide proof of the deducted income from Intellectual Property Rights and the costs of Intellectual Property Rights. This is called a ‘track & trace’ system. Specifically, a clear overview must be available of the effective value (purchase value or royalty payment) of an Intellectual Property Right, purchased or otherwise, of the innovation income and of the qualifying and global costs.

  • Are there any transitional measures?

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    The new system can be applied to financial years that close on or after 1 July 2016. If a company already obtains a patent income deduction under the old system, it has the option to continue applying the old system. However, it is important to make the right decision, because it cannot be changed later. It will be possible to apply this transitional measure until 31 July 2021.

  • What is patentbox.be?

  • Close

    Patentbox.be is a website that explains the tax benefits of protected innovation. Companies can increase their capacity to innovate with patents, plant breeders’ rights and innovative software. The Belgian government offers innovative companies a significant tax incentive for this. Belgian Patent Box is intended to support these innovative companies.
    Patentbox.be is powered by the specialists in Intellectual Property Rights at Brantsandpatents.

  • What are plant breeders’ rights?

  • Close

    Plant breeders’ rights protect new and valuable plant species. They give rights holders’ exclusive right over the seeds and the propagating material of the variety in question. Plant breeders’ rights apply to one specific variety. Plant patents, on the other hand, may give the holder the exclusive right to certain plant characteristics and may therefore be much more extensive.

    Plant breeders’ rights also give your company a tax advantage. An innovative company with revenue from plant breeders’ rights benefits from a lower corporation tax rate. This way, tax authorities create more breathing room for innovation within your plant breeding company. Your company may be able to benefit from this as well. Let us help you develop plant breeders’ rights for your company..

  • What is innovative software?

  • Close

    Innovative software developed by or for your company may also offer you a tax advantage. This software will have to be innovative compared to the systems already in use. Registering (dating the code) and being able to prove the degree of innovation will be important conditions for benefiting from the tax advantage. We will be glad to assist you in the process of registering your innovative software.

  • What is a patent?

  • Close

    A patent is an exclusive right to exploit a technical invention. A patent is limited in time and valid up to 20 years after filing the patent application. A patent gives its owner the right to exclude others (alleged infringers) to exploit the patented invention. A Belgian patent is a patent that is valid for Belgium only.

  • How do you obtain a Belgian patent?

  • Close

    Working with a patent specialist (also referred to as a Patent Attorney), your innovative concept is analysed and defined in a patent application. This is a technical legal description of your concept that consists of text and usually also includes designs. A patent application is intended to describe the concept technically as clearly as possible, but also as broadly as possible in legal terms. A patent application usually has about 15 pages and 15 conclusions. Conclusions are the legal definitions of the innovative concept.


    The application is filed at the Ministry of Economy and the required charges are paid. After 8-10 months you receive a report on the innovative character of your concept from the European Patent Office and you can make adjustments. After 18 months your Belgian patent is always granted, with or without adjusted conclusions. In other words, a Belgian application is always converted into a Belgian patent, even if the report is somewhat negative. Belgian patents are sometimes called ‘rubber-stamp’ patents; they are always granted without further in-depth investigation.

  • How does innovatieaftrek.be work with patent specialists or Patent Attorneys?

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    A thorough knowledge of patents is vital when applying Belgian Patent Box. Often the innovative company itself is not aware of the possibilities for patenting its work. Patent Attorneys are ‘detectives’ who investigate the innovations within the company that can be valorised and are eligible for patenting. Then they convert the innovations they have detected into patents. These patents both protect the innovation and enable it to benefit from Belgian Patent Box.

  • How do we work together with your tax advisor?

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    The Patent Attorney works closely with the tax expert. To make the calculation correctly and prepare an advance ruling or pre-ruling, accurate knowledge of the patent laws is essential. The Belgian Patent Box is calculated and justified in collaboration with the tax expert.

  • How can we help clients?

  • Close

    Flemish companies have many competent and high-skilled employees who take your company to a higher level every day. These innovative resources must not go to waste. Innovatieaftrek.be aims to help these companies and their employees grow further. A proper implementation of Belgian Patent Box is an essential element of this. Innovatieaftrek.be wishes to play its part in this process.

  • To which Intellectual Property Rights does the Belgian Patent Box apply?

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    The Belgian Patent Box applies to patents, patent applications and supplementary protection certificates (ABC or SPC certificates). It also applies to plant breeders’ rights applied for since 1 July 2016 or obtained since 30 June 2016, orphan medicinal products (limited to the first 10 years after registration in the European Register) applied for since 1 July 2016 or obtained since 30 June 2016, exclusive data or market rights or plant protection products, medicines, animal medicines and orphan medicines and innovative software but only on the condition that these rights are derived from a development project submitted to the Programmatic Public Service (PPS) for Science Policy.

  • Is Belgian Patent Box applicable to patent applications that have been filed (but not yet granted)?

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    Yes, Belgian Patent Box can also be applied to patent applications or plant breeders’ rights applications. In fiscal terms, this is done by establishing a temporary exempt reserve for the same amount as the deduction to which the company would be entitled if the patent or plant breeder’s right were granted. This established reserve is then definitively exempted when the patent or plant breeder’s right is granted. A patent application in Belgium is usually granted eighteen months after filing.

  • Who can apply the Belgian Patent Box?

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    Belgian companies that are involved in R&D and have an Intellectual Property Right in full ownership or as a co-owner, usufructuary and/or licensee are eligible.

  • How is the Belgian Patent Box calculated?

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    The new Belgian Patent Box only applies to net income. This is calculated for each Intellectual Property Right and for each tax year as follows:

    • The gross income consists of the income from Intellectual Property Rights included in the Belgian taxable basis.

    • The following amounts are subtracted from this gross income:

      • Costs of research and development directly related to the eligible Intellectual Property Rights. To be clear, costs relating to land or buildings, or other costs that are not directly related to Intellectual Property Rights cannot be deducted.

      • Costs for the acquisition of Intellectual Property Rights

      • Costs for research and development incurred by related or unrelated companies

    This net income is then multiplied by the Nexus factor.

  • Are there specific documentation requirements for applying Belgian Patent Box?

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    In order to benefit from the Belgian Patent Box, taxpayers will have to use a track & trace system to show which R&D efforts are linked to the intellectual property rights. More specifically, a form will have to be attached to their report. The calculation of the new deduction also requires you to justify all elements. 
The taxpayer is obliged to keep a documentation file. This file must contain all the documents that justify the following elements for each intellectual property right: a calculation of the gross and net income from that right and a calculation of the fraction for the qualifying income.

  • What is the status of the law for the Belgian Patent Box?

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    The law for the Belgian Patent Box was passed on 9 February 2017 and appeared in the Belgian Official Gazette on 20 February 2017.

Innovatieaftrek.be provides information about the applications of the Belgian Patent Box in Belgium. You cannot consider this information as personal, professional or legal advice or the equivalent of such advice.

What is a patent?

A patent is an exclusive right to exploit a technical invention. A patent is limited in time and valid up to 20 years after filing the patent application. A patent gives its owner the right to exclude others (alleged infringers) to exploit the patented invention. A Belgian patent is a patent that is valid for Belgium only.

Close

What is patentbox.be?

Patentbox.be is a website that explains the tax benefits of protected innovation. Companies can increase their capacity to innovate with patents, plant breeders’ rights and innovative software. The Belgian government offers innovative companies a significant tax incentive for this. Belgian Patent Box is intended to support these innovative companies.
Patentbox.be is powered by the specialists in Intellectual Property Rights at Brantsandpatents.

Close

Is Belgian Patent Box applicable to patent applications that have been filed (but not yet granted)?

Yes, Belgian Patent Box can also be applied to patent applications or plant breeders’ rights applications. In fiscal terms, this is done by establishing a temporary exempt reserve for the same amount as the deduction to which the company would be entitled if the patent or plant breeder’s right were granted. This established reserve is then definitively exempted when the patent or plant breeder’s right is granted. A patent application in Belgium is usually granted eighteen months after filing.

Close

What are plant breeders’ rights?

Plant breeders’ rights protect new and valuable plant species. They give rights holders’ exclusive right over the seeds and the propagating material of the variety in question. Plant breeders’ rights apply to one specific variety. Plant patents, on the other hand, may give the holder the exclusive right to certain plant characteristics and may therefore be much more extensive.

Plant breeders’ rights also give your company a tax advantage. An innovative company with revenue from plant breeders’ rights benefits from a lower corporation tax rate. This way, tax authorities create more breathing room for innovation within your plant breeding company. Your company may be able to benefit from this as well. Let us help you develop plant breeders’ rights for your company..

Close

What is innovative software?

Innovative software developed by or for your company may also offer you a tax advantage. This software will have to be innovative compared to the systems already in use. Registering (dating the code) and being able to prove the degree of innovation will be important conditions for benefiting from the tax advantage. We will be glad to assist you in the process of registering your innovative software.

Close

How is the Belgian Patent Box calculated?

The new Belgian Patent Box only applies to net income. This is calculated for each Intellectual Property Right and for each tax year as follows:

  • The gross income consists of the income from Intellectual Property Rights included in the Belgian taxable basis.

  • The following amounts are subtracted from this gross income:

    • Costs of research and development directly related to the eligible Intellectual Property Rights. To be clear, costs relating to land or buildings, or other costs that are not directly related to Intellectual Property Rights cannot be deducted.

    • Costs for the acquisition of Intellectual Property Rights

    • Costs for research and development incurred by related or unrelated companies

This net income is then multiplied by the Nexus factor.

Close

To which Intellectual Property Rights does the Belgian Patent Box apply?

The Belgian Patent Box applies to patents, patent applications and supplementary protection certificates (ABC or SPC certificates). It also applies to plant breeders’ rights applied for since 1 July 2016 or obtained since 30 June 2016, orphan medicinal products (limited to the first 10 years after registration in the European Register) applied for since 1 July 2016 or obtained since 30 June 2016, exclusive data or market rights or plant protection products, medicines, animal medicines and orphan medicines and innovative software but only on the condition that these rights are derived from a development project submitted to the Programmatic Public Service (PPS) for Science Policy.

Close

How can we help clients?

Flemish companies have many competent and high-skilled employees who take your company to a higher level every day. These innovative resources must not go to waste. Innovatieaftrek.be aims to help these companies and their employees grow further. A proper implementation of Belgian Patent Box is an essential element of this. Innovatieaftrek.be wishes to play its part in this process.

Close

How do you obtain a Belgian patent?

Working with a patent specialist (also referred to as a Patent Attorney), your innovative concept is analysed and defined in a patent application. This is a technical legal description of your concept that consists of text and usually also includes designs. A patent application is intended to describe the concept technically as clearly as possible, but also as broadly as possible in legal terms. A patent application usually has about 15 pages and 15 conclusions. Conclusions are the legal definitions of the innovative concept.


The application is filed at the Ministry of Economy and the required charges are paid. After 8-10 months you receive a report on the innovative character of your concept from the European Patent Office and you can make adjustments. After 18 months your Belgian patent is always granted, with or without adjusted conclusions. In other words, a Belgian application is always converted into a Belgian patent, even if the report is somewhat negative. Belgian patents are sometimes called ‘rubber-stamp’ patents; they are always granted without further in-depth investigation.

Close

Will the patent income deduction continue to exist?

Although the patent income deduction in its current form will soon disappear, a similar scheme will continue to exist, albeit in an adjusted form. The name of the new system is Belgian Patent Box, which covers more than just income from patents.

Close

Are there specific documentation requirements for applying Belgian Patent Box?

In order to benefit from the Belgian Patent Box, taxpayers will have to use a track & trace system to show which R&D efforts are linked to the intellectual property rights. More specifically, a form will have to be attached to their report. The calculation of the new deduction also requires you to justify all elements. 
The taxpayer is obliged to keep a documentation file. This file must contain all the documents that justify the following elements for each intellectual property right: a calculation of the gross and net income from that right and a calculation of the fraction for the qualifying income.

Close

What is Nexus?

Nexus means the following fraction:


qualifying R&D costs (A + B) global R&D costs (A + B + C + D)

  • A: direct R&D costs incurred by the company itself
  • B: R&D costs incurred by unrelated companies
  • C: R&D costs incurred by related companies
  • D: Costs of acquiring the Intellectual Property Rights

The result of the fraction can never be greater than 1.

Close

What are qualifying costs?

These are the R&D costs that relate directly to intelligent property rights. These costs must be either made or borne by the company itself, or by an unrelated company, or a related company in the case of payments for costs charged through to a related company without adding a profit margin (known as ‘disbursements’).

Close

What are the global costs?

The global costs include the qualifying costs, the costs of purchasing Intellectual Property Rights and the costs of R&D activities carried out by a related company.


If the fraction results in a fundamentally inaccurate representation of reality, the company is entitled to request an ‘advance ruling’ or prior decision. The requirement for this is that the fraction is at least 25% before the increase is applied.


Furthermore, the company must also demonstrate its exceptional circumstances annually, which prove that the fraction does not correspond to the added value of the R&D activities carried out by the company itself.

Close

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