New investment rules in Belgium from 2025: what do you need to know as an entrepreneur?
January 2025 - From 1 January 2025, the investment deduction landscape in Belgium will change dramatically. Whereas entrepreneurs and companies could previously deduct almost any investment, the updated regulations call for a more targeted approach.
Investment deduction: basic principles
As an entrepreneur, you can include depreciation on investments as professional expenses, which reduces taxable profits. Under certain conditions, an additional investment deduction comes on top of this. The higher this deduction, the less taxes you pay. Until now, however, the rules were fragmented and not tailored to specific policy goals. This is now changing.
Three types of deduction
From 2025, the rules will become clearer and the investment deduction will consist of three categories:
· Basic deduction: applies to SMEs and sole traders. The percentage increases from 8% to 10%.
· Technology deduction: aimed at investments in research, development and patents. The percentages are 13.5% for one-off deductions and 20.5% for staggered deductions.
· Thematic deduction: for green investments and digital transformation. Depending on the nature of the investment, the deduction rate can reach 40% for SMEs and 30% for large companies.
You can't combine thematic deductions with subsidies from the regions, such as those from Vlaio.
Digital and technology investments
Investment in digitalisation gets a major boost. For instance, as an SME, you can deduct 20% for software and equipment that support digital processes, such as e-commerce platforms, digital accounting systems and IT infrastructure security.
The technology deduction is also being reformed. Fixed percentages offer more predictability as they are no longer linked to inflation.
Focus on green investments
With the thematic deduction, the government wants to encourage companies to make sustainable investments. Examples include:
· Energy efficiency: insulation, high-efficiency glass and energy upgrades to existing facilities.
· Renewable energy: investments such as heat pumps, wind turbines and battery farms are eligible, but solar panels are excluded due to the short payback period.
· Carbon-free transport: electric vehicles, charging stations, green ships and other environmentally friendly transport options.
· Eco-friendly innovations: including recycling processes, water-saving technology and greening of business premises.
Some green investments require an energy audit to determine suitability.
What falls outside the deduction?
Although the basic deduction is broadly applicable, seven categories of investments are excluded. Besides the already known exclusions, such as private cars and private use, investments with a harmful environmental impact are now excluded. This includes:
· Fossil fuels and related infrastructure
· The production of pesticides or toxic substances
· Harmful fishing methods and sea mining
· Investments that damage nature or contribute to transboundary waste streams
Lists of specific conditions
Resigning finance minister Vincent Van Peteghem stressed that the new rules offer clarity to entrepreneurs. Lists have been drawn up to specify which investments are excluded from the basic deduction and which are eligible for the thematic deduction. These are revised every three years to include technological and social developments. Currently, the royal decree on this matter is before the Council of State for advice.
