In an ongoing quest to stimulate innovation, the Belgian innovation income deduction (IID) regime was introduced. The IID regime is a beneficial tax regime that reduces the effective rate of taxation on qualifying net income from patents, qualifying copyright-protected software, and some other intellectual property rights. Many Belgian companies have found their way to this regime, supporting them in financing their research and development activities eventually resulting in the creation of innovative solutions.
In the context of tax audits, a shift in focus towards the IID regime could be observed in recent years, with increasingly aggressive positions being taken which could result in significant tax adjustments and cash tax impact.
Most wanted by tax inspectors: Innovation Income Deduction