Innovatieaftrek.be provides information about the applications of the Belgian Patent Box in Belgium. You cannot consider this information as personal, professional or legal advice or the equivalent of such advice.
A patent is an exclusive right to exploit a technical invention. A patent is limited in time and valid up to 20 years after filing the patent application. A patent gives its owner the right to exclude others (alleged infringers) to exploit the patented invention. A Belgian patent is a patent that is valid for Belgium only.
Patentbox.be is a website that explains the tax benefits of protected innovation. Companies can increase their capacity to innovate with patents, plant breeders’ rights and innovative software. The Belgian government offers innovative companies a significant tax incentive for this. Belgian Patent Box is intended to support these innovative companies.
Patentbox.be is powered by the specialists in Intellectual Property Rights at Brantsandpatents.
Yes, Belgian Patent Box can also be applied to patent applications or plant breeders’ rights applications. In fiscal terms, this is done by establishing a temporary exempt reserve for the same amount as the deduction to which the company would be entitled if the patent or plant breeder’s right were granted. This established reserve is then definitively exempted when the patent or plant breeder’s right is granted. A patent application in Belgium is usually granted eighteen months after filing.
Plant breeders’ rights protect new and valuable plant species. They give rights holders’ exclusive right over the seeds and the propagating material of the variety in question. Plant breeders’ rights apply to one specific variety. Plant patents, on the other hand, may give the holder the exclusive right to certain plant characteristics and may therefore be much more extensive.
Plant breeders’ rights also give your company a tax advantage. An innovative company with revenue from plant breeders’ rights benefits from a lower corporation tax rate. This way, tax authorities create more breathing room for innovation within your plant breeding company. Your company may be able to benefit from this as well. Let us help you develop plant breeders’ rights for your company..
Innovative software developed by or for your company may also offer you a tax advantage. This software will have to be innovative compared to the systems already in use. Registering (dating the code) and being able to prove the degree of innovation will be important conditions for benefiting from the tax advantage. We will be glad to assist you in the process of registering your innovative software.
The new Belgian Patent Box only applies to net income. This is calculated for each Intellectual Property Right and for each tax year as follows:
The gross income consists of the income from Intellectual Property Rights included in the Belgian taxable basis.
The following amounts are subtracted from this gross income:
Costs of research and development directly related to the eligible Intellectual Property Rights. To be clear, costs relating to land or buildings, or other costs that are not directly related to Intellectual Property Rights cannot be deducted.
Costs for the acquisition of Intellectual Property Rights
Costs for research and development incurred by related or unrelated companies
This net income is then multiplied by the Nexus factor.
The Belgian Patent Box applies to patents, patent applications and supplementary protection certificates (ABC or SPC certificates). It also applies to plant breeders’ rights applied for since 1 July 2016 or obtained since 30 June 2016, orphan medicinal products (limited to the first 10 years after registration in the European Register) applied for since 1 July 2016 or obtained since 30 June 2016, exclusive data or market rights or plant protection products, medicines, animal medicines and orphan medicines and innovative software but only on the condition that these rights are derived from a development project submitted to the Programmatic Public Service (PPS) for Science Policy.
Flemish companies have many competent and high-skilled employees who take your company to a higher level every day. These innovative resources must not go to waste. Innovatieaftrek.be aims to help these companies and their employees grow further. A proper implementation of Belgian Patent Box is an essential element of this. Innovatieaftrek.be wishes to play its part in this process.
Working with a patent specialist (also referred to as a Patent Attorney), your innovative concept is analysed and defined in a patent application. This is a technical legal description of your concept that consists of text and usually also includes designs. A patent application is intended to describe the concept technically as clearly as possible, but also as broadly as possible in legal terms. A patent application usually has about 15 pages and 15 conclusions. Conclusions are the legal definitions of the innovative concept.
The application is filed at the Ministry of Economy and the required charges are paid. After 8-10 months you receive a report on the innovative character of your concept from the European Patent Office and you can make adjustments. After 18 months your Belgian patent is always granted, with or without adjusted conclusions. In other words, a Belgian application is always converted into a Belgian patent, even if the report is somewhat negative. Belgian patents are sometimes called ‘rubber-stamp’ patents; they are always granted without further in-depth investigation.
Although the patent income deduction in its current form will soon disappear, a similar scheme will continue to exist, albeit in an adjusted form. The name of the new system is Belgian Patent Box, which covers more than just income from patents.
In order to benefit from the Belgian Patent Box, taxpayers will have to use a track & trace system to show which R&D efforts are linked to the intellectual property rights. More specifically, a form will have to be attached to their report. The calculation of the new deduction also requires you to justify all elements. The taxpayer is obliged to keep a documentation file. This file must contain all the documents that justify the following elements for each intellectual property right: a calculation of the gross and net income from that right and a calculation of the fraction for the qualifying income.
Nexus means the following fraction:
The result of the fraction can never be greater than 1.
These are the R&D costs that relate directly to intelligent property rights. These costs must be either made or borne by the company itself, or by an unrelated company, or a related company in the case of payments for costs charged through to a related company without adding a profit margin (known as ‘disbursements’).
The global costs include the qualifying costs, the costs of purchasing Intellectual Property Rights and the costs of R&D activities carried out by a related company.
If the fraction results in a fundamentally inaccurate representation of reality, the company is entitled to request an ‘advance ruling’ or prior decision. The requirement for this is that the fraction is at least 25% before the increase is applied.
Furthermore, the company must also demonstrate its exceptional circumstances annually, which prove that the fraction does not correspond to the added value of the R&D activities carried out by the company itself.