6. ATTRACTIVE TAX REGIME FOR R&D INVESTMENTS – PATENT INCOME DEDUCTION
A number of tax measures designed to stimulate innovation in Belgium have been implemented (tax credit for R&D, patent income deduction, etc). These measures make Belgium particularly attractive for innovative companies and intangible property centres.
The most important measure was introduced in 2007 and provides for a deduction from taxable income of up to 80% of the income derived from patents that were either:
• partly or fully self-developed by a Belgian company or branch in a research and development centre in Belgium or abroad, or
• acquired/licensed from third parties and subsequently improved by the company or branch in a research centre in Belgium or abroad.
Since assessment year 2014, the condition that patents should be developed or improved in a research centre in Belgium or abroad is no longer applicable to SMEs.
The 80% deduction not only applies to royalty income from the licensing of patents but also to patent income that is embedded in the price of products manufactured by the company or on its behalf where the patent is used by the company in the process of manufacturing patented products.The 80% deduction is not capped.
As a result, patent income is now subject to an extremely favourable tax rate of approximately 6.8% (one-fifth of the Belgian statutory rate of 33.99%). The effective tax rate will be even lower in practice considering that existing tax incentives for R&D investments remain in place. All research and development expenses (such as salary costs; research and development infrastructure costs; patent registration duties; and depreciation, administration and finance costs) relating to self-developed patents continue to be deductible in accordance with standard Belgian tax rules.
Note that a favourable specific « tax shelter » regime exists for financing cinematographic productions in Belgium.
ATTRACTIVE TAX REGIME FOR R&D INVESTMENTS – PATENT INCOME DEDUCTION
7. TAX NEUTRAL REGIME FOR CROSS-BORDER REORGANIZATIONS
The array of measures which contribute to making Belgium an attractive location for foreign investments was further added to in January 2009 by a comprehensive tax framework allowing intra-European reorganizations, involving one or more Belgian entities and/or Belgian permanent establishments, to take place in a tax-neutral way. The tax neutral regime is not only applicable at the level of the companies involved in the reorganization (roll-over of capital gains, creation of equity, transfer of tax losses) but also in the hands of their shareholders (tax-neutral exchange of shares). Some of the new rules in the Belgian act go further than the strict scope of the EU Merger Directive and may give room for tax efficient restructuring opportunities.
8. FLEXIBLE COMPANY AND LABOUR LAWS
Belgian company law is modern, with a Companies Code often deemed to be more effective and flexible than neighbouring legislations. Recent legislation has somewhat relaxed the rules on financial assistance, which were already more flexible than in, e.g., the UK. Provisions on contributions in kind to public and private limited liability companies and limited cooperatives have also been simplified; as a result, certain contributions in kind no longer require auditing. And the conditions applicable to the acquisition of own shares in public and private limited liability companies have been relaxed.
As a general rule, an employer has the choice to terminate an employment contract either by observing a notice period or paying compensation in lieu of notice. Special procedures have to be gone through when dismissing « protected workers », in particular workers’ representatives on a works council or a health and safety at work committee. Strict rules also apply in the case of collective redundancies.
Regarding the notice period, a unified regime for blue-collar and white-collar workers entered into force on 1 January 2014. For dismissal and resignation, the new notice periods now depend solely on length of service. Salary levels and the employee’s position no longer affect the termination package for white-collar workers.
Notice periods notified as of 1 January 2014 start on the Monday that follows the notification date (as determined by law). Notices are expressed in weeks, not months or days. Dismissals notified as from 1 April 2014 have to be justified if requested by the dismissed employee. As from the same date, the specific protection for blue-collar workers under the unfair dismissal rules has come to an end, except for some categories of blue-collar employees.
In general, the trial period no longer exists.
A system of temporary unemployment that used only to exist for blue-collar workers was also introduced for white-collar workers in 2009 and allows for temporary suspension of employment contracts in order to reduce labour costs during periods of economic crisis without having to make people redundant.
The law provides various means to introduce flexible working arrangements, such as flexible working hours, part-time work with variable working schedules and teleworking.
Workers’ representation is organized through a works council (in companies that employ an average of at least 100 workers) and/or a health and safety at work committee (in companies that employ an average of 50 workers or more) and/or a union delegation (in companies reaching a certain threshold of unionized workers as determined at sector level.
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source : https://www.linkedin.com/pulse/reasons-67-810-invest-belgium-camille-caudron-lion-?trk=hp-feed-article-title-publish