On July 23, the Law on the increased investment deduction of 25% and the extended portability of the investment deduction was published in the Belgian Official Gazette. The first measure was created to encourage companies not to postpone their investments to subsequent years but to make them as late as 2020.
Increased investment deduction
The standard percentage of the one-time investment deduction is set at 8% for companies today. For investments between January 1, 2018 and December 31, 2019, this percentage was temporarily increased to 20%. Following the Corona crisis, it was decided to increase the standard percentage once again to 25 % for investments between 12/03/2020 and 31/12/2020. For investments between 01/01/2020 and 11/03/2020, the standard rate of 8% remains applicable.
The increased basic rate applies, on the one hand, to companies that are classified as small companies in the taxable period in which the investment is made and, on the other hand, to individuals with professional income (in the categories of profits and income).
To enjoy the investment deduction, the investment must be in depreciable tangible or intangible assets that:
- Have been obtained or created in new condition;
- During the year or fiscal year;
- And are used in Belgium to carry out the professional activity.
Transferability of investment deduction
If a corporate legal entity makes no or insufficient profits during the current taxable period for which the increased investment deduction was applied, it can only carry forward the "unused" investment deduction once to a subsequent taxable period. Natural persons (profits and gains) can carry forward the increased one-time investment deduction indefinitely.
With the July 23 law, for the company-law entity, the transferability is now extended to two years and this for investments in fixed assets that took place in 2019. This makes it possible, if the investment deduction could not be used in 2020 either, to carry it forward exceptionally a second time to the next taxable period 2021.