To ease the impact of the Covid-19 health crisis on companies, both government and parliament have enacted multiple support measures.
One of these support measures is a temporarily increased investment deduction of 25% (instead of 8%) for investments made between March 12 and December 31, 2020.
The investments must meet the following conditions:
- Investments made in tangible fixed assets (e.g.: buildings, equipment, machinery, lease, …) or in intangible fixed assets (e.g.: R&D expenses, patents, …);
- Newly acquired or produced by company itself;
- Used in Belgium for professional activity;
- Amortization over at least 3 years.
Certain investments are excluded from the investment deduction. That is for example the case for investments in non-amortizable assets (e.g.: land), financial assets, second-hand goods, etc.
As was previously the case, only so-called ‘small’ companies are eligible for this temporarily increased deduction. A company is considered ‘small’ if, at the end of its last accounting period, it exceeded no more than 1 of the following thresholds (at a group level):
- Workforce : 50 full-time employees
- Turnover (VAT excluded) : 9 MM euro
- Balance sheet total 4.5 MM euro
For companies, the increased investment deduction is a one-shot operation, applied in the tax filing subsequent to the year of investment. If there is no or insufficient taxable income, the excess can be carried forward once, to the next year (capped at 1.026 MM euro or 25% of the excess when the excess is worth more than 4.1 MM euro).
On top of that, companies that applied the investment deduction in 2019 will be allowed to carry forward any excesses to the next two years, instead of just one.
Leyton will happily respond to any questions you would have on these temporary support measures, and our experts can help determine whether your company has investments made or planned that can benefit from the increased investment deduction.
