Innovation Funding
According to EU guidelines, each member country must spend at least 3% of their GDP in R&D activities. This is one of the cornerstones of the European strategy to remain competitive with rising foreign powers.
Stimulating research and development activities intensity is an absolute priority for EU member countries, as R&D investments are crucial to innovation and act as a catalyst for long-term economic growth.
Researching and developing new products, methods, processes or services constitutes a lengthy and risky process resting on heavy investments with little in the way of guaranteed results. For this reason, private companies invest only marginally in R&D – the average for the chemical industry is around 3% of their annual revenue being reinvested in R&D efforts, with the pharmaceutical industry leading the charge at a whopping 25%.
To reduce the short-term risk, countries have created public policies that allow public and private companies to benefit from tax breaks or direct subsidies to incentivize R&D expenditures, and the EU set a goal of R&D expenditures totaling 3% of the country’s GDP.
Belgium reached 2.7% of its GDP in 2017, which is far better than the EU28 average of 1.6%, thanks to the following incentives:
- The Federal Government grants the following tax breaks:
- Partial Payroll Tax Exemption for scientific personnel working on R&D projects: this tax incentive allows companies to save an average of 12.000 € per FTE per year.
- R&D Investment Deduction: this tax incentive allows companies to deduct part of their qualifying R&D investments from their taxable base.
- Innovation Income Deduction: the IID allows private companies to deduct up to 85% of their Net Innovation Income from their taxable base.
- Each Regional Government grants R&D subsidies through its subsidizing body:
- SPW Recherche
- Innoviris
- VLAIO
Through our experience, we notice that companies usually know that these funding instruments are available, but struggle to implement them safely while taking advantage of their fullest potential.
Forecast Consulting is a Belgian consultancy company which offers a range of expertise in all the available tax breaks and subsidies when it comes to funding your innovation.
We have over 12 years of experience navigating these areas of Belgian tax law and subsidies, and we offer a streamlined approach:
- Each mission is carried out by project managers, scientific and/or grant consultants, financial and fiscal analysts and taw lawyers.
- We use tried-and-true methodologies which have been approved by the tax administration on many files.
- Deep knowledge of the Belgian legal and tax standards and practices which allows us to represent our clients’ best interests while maintaining a productive and courteous relationship with the FPS Finances, the Belspo and other stakeholders.
- Forecast Lab™: our internal Legal Lab is on constant alert to ensure that we are aware of any potential modifications in the law and stay on top of the field.
