What’s new

• Clean Hydrogen Partnership: Call for proposals

• Applied biomedical research call launched by Flanders Scientific Research Fund (FWO)

• Flanders eases energy support for companies

Funding 

• European Commission adopts main work programme of Horizon Europe for 2023-2024

• Eureka launches call for joint project proposals between Austria, Belgium, Chile, France, and Spain

• EUR 30 million awarded to 14 innovative recycling projects in Flanders

• Ambitious energy policy agreements and enhanced legislation introduced to promote efficiencies in Flemish industry

R&D tax incentives

• Belspo notification: Reminder for applying the partial withholding tax exemption for researchers and innovation income deduction

• Reminder of restrictions on combined application of R&D tax credit and wage withholding tax exemption for researchers

• Belgian landmark case on wage withholding tax exemption for R&D – continued

Clean Hydrogen Partnership: Call for proposals

The Clean Hydrogen Partnership is a public-private partnership encouraging and supporting research and innovation in the field of hydrogen technologies in Europe. In an unprecedented drive to support the creation of cutting-edge hydrogen technologies, a total of EUR 195 million will be made available for relevant projects. The January 2023 call for proposals was published on 17 January 2023, with an application deadline of 18 April 2023. For more details, see our Tax Alert of 27 January 2023.

Applied biomedical research call launched by Flanders Scientific Research Fund (FWO)

Flanders Scientific Research Fund (FWO) launched its annual call for applied biomedical research projects (Dutch I English) with a primarily societal goal, with a submission deadline of 17:00 (16:00 GMT) on 16 March 2023. 

Qualifying projects are projects aimed at the development of a new therapy; diagnosis and/or specific prevention of a particular human disease or medical problem; or a comparison of existing therapies, diagnostic methods, or preventive measures, which demonstrate relative efficacy and costeffectiveness.

The result of the project should provide added value to Flemish health services, including as a minimum a positive medical impact for a defined group of patients, or a cost saving for the Flemish healthcare system.

Note that this call requires a research or knowledge organisation (e.g., universities, university hospitals, colleges, strategic research centres) to be the lead applicant. The programme supports projects that would not succeed without public funding due to a lack of industrial interest.

Flanders eases energy support conditions for companies

The Flemish government has decided that companies wishing to apply for energy support to cover higher energy bills in the first quarter of 2023 are no longer required to have operational losses. The change follows new information showing that companies were not using the energy support scheme and complaints received from sector federations about the strict conditions. An agreement to adjust the subsidy for high energy prices was reached at the end of January 2023.

Companies are no longer required to make an operational loss to qualify for the scheme; as from the first quarter of 2023, it is sufficient to show that EBITDA (earnings before interest, taxes, depreciation, and amortisation) has fallen by at least 50% over two consecutive financial years. In addition, support amounts are being increased: prior to quarter 4 (Q4) 2022, only the additional costs in excess of an 100% increase in energy expenditure were reimbursed. In Q1 2023, additional costs in excess of a 50% increase will be reimbursed. To claim the subsidy, the total additional cost of gas and electricity must be at least 35% of an entity’s EBITDA before the energy crisis, and the company must have spent at least EUR 7,500 on electricity and gas in 2021.

Nevertheless, not all conditions are being removed. Existing requirements that continue to apply include that companies receiving support must remain active in Flanders for at least five years, may not pay dividends until the end of 2023, must not put more than 35% of staff on temporary unemployment, and must commit to reducing their energy consumption in an agreement with the government.

This support may only be available temporarily, as energy prices are now moving in a downward trend.

European Commission adopts main work programme of Horizon Europe for 2023-2024

On 6 December 2022, the European Commission adopted the main Horizon Europe work programme for 2023-2024, with a budget of EUR 13.5 billion to support researchers and innovators in Europe to pursue breakthrough solutions for environmental, energy, digital, and geopolitical challenges. In light of the new geopolitical situation, this work programme also includes a special emphasis on actions that contribute to a safe and secure Europe, help reduce energy and other dependencies, and build a more robust economic base. For more details, see our Tax Alert of 22 December 2022.

Eureka launches call for joint project proposals between Austria, Belgium, Chile, France, and Spain

On 12 December 2022, Eureka—the world’s biggest public network for international cooperation in R&D and innovation—launched a new call for joint projects between Austria, Belgium, Chile, France, and Spain. For more details, see our Tax Alert of 20 December 2022.

EUR 30 million awarded to 14 innovative recycling projects in Flanders

On 1 December 2022, the Flemish Minister of Justice and Enforcement, Environment, Energy and Tourism, Zuhal Demir, approved on behalf of the Flemish government eight projects for a grant under the second Recycling Hub call for proposals, distributing a budget of EUR 15 million in funding between the eight winners. A total of EUR 30 million has been awarded over the two consecutive project calls to 14 projects presented by companies investing in innovative recycling technologies to close material cycles. The call was launched by OVAM (Public Waste Agency of Flanders) on 30 May 2022 with applications for funding requested by 22 August 2022. For more details, see our Tax Alert of 14 December 2022.

Ambitious energy policy agreements and enhanced legislation introduced to promote efficiencies in Flemish industry

The Flemish government is looking to take major steps forward in the climate and energy transition arena by enacting a new energy decree (“Energiebesluit”) that will encourage companies to realise their energy saving potential, not only by reducing their carbon dioxide (CO2) emissions, but also by improving competitiveness through reducing energy costs. The government has long been focused on supporting large companies to improve the energy efficiency of their processes and reduce energy use as much as possible, but is now encouraging even more companies to concentrate on this spend, by introducing new energy management processes and increasing the scope of legislation to include additional companies. For more details, see our Tax Alert of 20 October 2022.

Belspo notification: Reminder for applying the partial withholding tax exemption for researchers and innovation income deduction

The Belspo notification process, which is mandatory when applying the partial withholding tax exemption for researchers, continues to trigger several discussions during tax audits. All employers applying this incentive are therefore encouraged to regularly review their Belspo notifications to ensure compliance with the regulations. For more details, see our Tax Alert of 13 December 2022.

Reminder of restrictions on combined application of R&D tax credit and wage withholding tax exemption for researchers

Although Belgian legislation does not prohibit the application of a combination of R&D incentives in respect of the same activities or assets, certain restrictions apply for taxable periods ending on or after 1 April 2022. New legislation on the reduction of labour costs as part of the “mini tax shift” was published in Belgium’s official journal on 31 March 2022 and includes provisions intended to prevent companies “double-dipping” by claiming both the R&D tax credit and the partial wage withholding tax exemption for researchers in respect of the same costs. For more details, see our Tax Alert of 21 November 2022.

Belgian landmark case on wage withholding tax exemption for R&D–continued

On 28 October 2022, the Belgian tax authorities filed an appeal with the Supreme Court against a milestone judgement obtained from the Ghent court of appeal by Deloitte Legal for a client on 24 May 2022, regarding the wage withholding tax exemption for R&D (article 275 (3) of the Income Tax Code) (see our Deloitte Legal Newsflash of 28 June 2022). The judgement confirmed some valuable principles that are of importance to taxpayers making use of the exemption. For more details, see our Deloitte Legal Newsflash of 18 November 2022.