Innovation Income Deduction

How can I benefit from it?

Unlock new opportunities for your business

Spotlight on Corporate Income Tax The ‘Innovation Income Deduction’ (IID) replaces the previous ‘Patent Income Deduction’ (PID) and offers a broader scope. It took effect retrospectively from 1 July 2016. This deduction allows a tax deduction up to 85% of the net income from innovation in corporate income tax or non-resident income tax (companies). Whereas the PID was limited to patents, IID also considers other intellectual property (IP) rights, such as copyright-protected software and plant breeders’ rights. Additionally, under certain conditions, the sale of IP or services based on IP could be considered income for the purposes of IID.

Copyright-Protected Software

Software, including derivatives or adaptations, is considered to be copyright-protected if it results from a research and development project or program within the meaning of art. 275 ITC (Income Tax Code), in particular the company withholding tax subsidy for knowledge workers. Copyright-protected software that has generated income before 1 July 2016 is excluded from the deduction for innovation income.

How we can help

To successfully claim the tax incentive for innovation income, taxpayers should rethink the way they are organising their intellectual property activities. Leyton can assist you in identifying eligible R&D activities as well as in preparing exhaustive supporting documentation throughout the whole process that includes document preparation, submission, and control.

Your Results

The goal is to identify and optimise, in a very pragmatic approach, how your company can benefit from this tax deduction in a safe and secure manner. Leyton combines tax expertise with experienced scientists and engineer’s capabilities to ensure efficiency as well as effectiveness.

Three cornerstones to assist tax payers in this particular domain:

● Analysing the potential corporate tax advantage
● Requesting advice from the Belgian Science Policy Office (BELSPO)
● Requesting a tax ruling at the Belgian Tax Authorities