R&D withholding tax update

At the close of 2024, BELSPO and the Federal Public Service (FPS) Financea announced new guidelines to improve the online registration of research and development (R&D) projects and streamline advisory requests.

The new guidelines confirm and clarify the substantially changed principles in effect since 1 August 2023, as a result of the Belgian Supreme Court ruling earlier that year. While consistent with the 2024 guidelines, they also present new ideas and terms, such as 'meaningful title,' and introduce fresh points of debate.

Key points of interest

Here are the key areas of interest based on the new guidelines:

Registration required prior to the start of R&D activities:

• A valid application is required prior to the start of the project or program.
•  Annual copies of current projects are no longer permitted; however, updates are possible.
• Copies of previously notified projects or programs with limited changes in content are considered repetitive and therefore not eligible for the tax benefit. It is not entirely clear how this should be interpreted. In our opinion, the initially notified project or program should logically still be eligible and the changes, if any, can be considered an update of the earlier notification. Consequently, sufficient attention should be paid to the consideration whether activities fall under an existing project or program (which may need to be updated), or whether they should be notified separately as a new project or program.
• Programs (consisting of multiple projects) can be registered without listing all projects. However, keeping a list of projects is recommended.

Clear project titles required (NEW):

• Generic or meaningless titles such as “Project X07” (sic) are no longer accepted because they do not provide sufficient insight into the content of the project or program.
  • A few questions can nevertheless be asked in this regard. When is a title ‘meaningful’ and for whom should it be ‘meaningful’? What are the consequences if the title is considered ‘meaningless’ by BELSPO. In our opinion, this appears more like a recommendation to simplify the overall assessment of the submission, especially if the comprehensive project or program description on the portal provides sufficient insight into the content of the project or program.

Evidence is essential

• Always keep a screenshot or PDF of both the original submission and changes, for tax audits afterwards. In doing so, it is important to include a creation date on the PDF file (in the document settings) so that it can be proven from when the PDF dates.

New procedure for requesting advice (NEW)

• No further details were given about the procedure itself. We assume that the advice request will be made through the BELSPO portal as in the past. It is still unclear whether a meeting can be scheduled with BELSPO to provide further clarification on the projects/programs or whether this procedure is done entirely in writing.
• Only projects or programs that are innovative for the sector are eligible. The requirement of ‘innovative to the sector’ is not found in legislation, nor in case law. The explanation BELSPO gives for this is that research or development projects or programs consisting of activities already carried out by other companies are not considered innovative. It is still unclear how this will be implemented and how this can be controlled. Does this refer to the sector in Belgium or worldwide and how will this be verified in practice (or will the company have to demonstrate this itself)?

To read the complete guidelines, please refer to the following link: Bedrijfsvoorheffing O&O | Aanmeldingen Fiscaliteit | Belspo (Dutch webpage)