Reminder of new requirement for BELSPO notification prior to 1 August 2023 for R&D wage tax exemption

On 27 April 2023, the Belgian tax authorities published new administrative guidance, in the form of Circular 2023/C/49 (Dutch I French), on the timing of the notification requirement for the application of the wage withholding tax partial exemption for researchers ("the WHT exemption”). This followed a ruling by the Court of Cassation on 6 January 2023 that the relevant research and development (R&D) project/program has to be notified to BELSPO prior to the effective start date of the R&D project/program for the exemption to apply.

In the circular, the tax authorities confirmed that they would retain their more flexible approach until 31 July 2023 but that the new interpretation would need to be followed for new notifications and new R&D projects/programs as from 1 August 2023. In practice, this means that a new project/program starting on 1 August 2023 must be notified to BELSPO no later than 31 July 2023 in order to apply the WHT exemption for the duration of the project/program. If a project/program describing R&D activities that begin on 1 August 2023 is notified on or after 1 August 2023, it will not be eligible for the WHT exemption at any time throughout the duration of the project/program. According to the same reasoning, ongoing R&D projects/programs that have not been notified or completed/updated by 1 August 2023 will no longer be eligible for the WHT exemption as from that date. 

Although there is no obligation to notify each individual subproject, cluster of subprojects, or subprogram separately, it would be advisable to make the notification as complete as possible to minimise the chances of further discussions during an audit by the tax authorities.

For the time being, the procedure of the annual or periodic notification of projects/programs is abandoned. The advice from BELSPO is to convert projects/programs already notified before 2023 into multi-year projects/programs, without a specific year in the title and with a realistic duration. However, this has to be assessed on a case-by-case basis to ensure that any action taken is based on a correct interpretation of the new legislation.

Actions to consider

• Check the status of ongoing R&D projects/programs.

• Ensure timely notification of new and updates to existing R&D activities.

• Consider notifying multi-year projects/programs.

• Expand the project/program description if necessary

• Check start and end dates of projects/programs.