Innovation income deduction for copyrighted software: New BELSPO guidelines

Belgium’s innovation income deduction (IID) regime allows taxpayers to exempt part of their intellectual property (IP)-linked revenue from taxation. The list of qualifying IP rights includes “copyrighted software,” i.e., copyrighted computer programs, including any derivative work or modification of an existing computer program. Software is considered intellectual property when it results from a research and/or development project or programme, as validated by the Belgian Science Policy Office (BELSPO) following an advice request from the taxpayer. 

With the ambition of BELSPO and FPS Finance to harmonise the procedures and guidelines for all parties—an objective further emphasised in the new government agreement in January 2025—a working group to examine various issues was established in early 2024.

On 31 May 2025, BELSPO published the second results of this consultation group (Dutch I French), representing the joint view of BELSPO and FPS Finance on new practical working guidelines regarding the IID. 

Two key areas of clarification relate to the IID notification and binding advice requests.

IID notification

Although the format in which taxpayers can create a new BELSPO project notification to ultimately request binding advice has not changed, there are some clarifications regarding:

• The required content, within which a non-generic title is advisable and a description of the research and development (R&D) activities to demonstrate that the project clearly goes beyond what has been part of a previous notification. The specific format in which additional information can be provided has also been defined as five pages of structured text or 10 slides.

• The period for which a notification can be made is suggested to be limited to a maximum of three years, considering that software developments are continuously ongoing.

• The notification must be made in one of Belgium’s three official languages (Dutch, French, or German).

IID advice request

Clarifications regarding the IID advice request include:

• The advice is valid for the period specified by BELSPO which may not be the same as the period requested by the taxpayer in the notification.

• Where binding advice in relation to the wage withholding tax exemption for researchers is obtained, the taxpayer may use that advice for the application of the IID provided a clear connection is demonstrated between the binding advice and the R&D project or programme that led to the IP.

• The requirement to differentiate the software from products already available on the market—while the R&D and resultant software may be new to the company, if the product is already available on the market, the software will not be eligible for the IID. This includes the further improvement of existing software that does not include a significant extension, renewal, or modification.

• Where an advance tax ruling is requested from the Belgian Ruling Commission, it is advisable to align the BELSPO advice request with the period for which the ruling is requested. If the BELSPO advice is negative, the applicant must inform the ruling commission accordingly.

Deloitte Belgium’s observations

The close ongoing collaboration between BELSPO and FPS Finance is evidently aimed at facilitating the development of clear and practical working guidelines, as already witnessed in the revised guidelines published at the end of 2024 for the R&D wage withholding tax exemption.

It remains to be seen how these new IID guidelines will operate. For example:

• BELSPO indicates that notification is a legal requirement but does not stipulate when the notification must be made.

• How can a taxpayer demonstrate sufficiently that a product is differentiated from the market and/or prior versions? Which markets will be examined? Will the deduction no longer be available to a Belgian company because similar software has been developed in, for example, China?

• What constitutes a software product and how will these guidelines be applied for software that is not available on the market?

• How will the timing difference between performing R&D activities and generating the actual economic value be taken into consideration during the evaluation process?

Deloitte Belgium’s Gi3 team comprises more than 40 professionals with STEM qualifications. We have significant experience in preparing and supporting advice requests and are available to discuss a potential approach for your specific situation.