The draft legal texts transposing the 15% minimum tax into Belgian law are ready (implementation of the EU Directive 2022/2523 of 14 December 2022).
The impact of tax incentives (in particular R&D incentives) is a hot topic. For in-scope multinationals, tax incentives could suddently become far less attractive if the tax benefit is cancelled out by an increase in top-up tax. A top up tax will indeed be triggered if the effective tax rate (ETR) falls below 15% as a result of such tax R&D incentive.
If R&D tax incentives become less attractive, this could lead to adverse economic circumstances (i.e., less foreign direct investment in Belgium, relocation of multinationals,…).
In order to remain competitive, the Belgian government intends to reduce the reimbursement period for the R&D tax credit from 5 to 4 years, so that it could be considered as a “qualified refundable tax credit”. Qualified refundable tax credit are viewed as
part of qualified income, not a reduction in or reimbursement of taxes. This favourable treatment will lead to a much smaller decrease of the ETR, compared to the situation where the tax credit would be considered as a tax reduction. In other words : this should mitigate the top up tax (if any).
As I said to the Belgian economic newspaper De Tijd, this is quite a nice “legal pirouette”!
By contrast, the Belgian IP Box (also called “deduction for innovation income” / “innovatieaftrek” / “déduction pour revenus d’innovation”) could in principle (significantly) lower the ETR, which could lead to an increase of the top up tax.
Cfr l’ itw de Denis-Emmanuel Philippe dans De Tijd
