Deduction of 80% for patent incomes
This new incentive, which allows companies to deduct 80% of the patent income from the taxable base, applies to corporate tax and to the tax of non-resident companies and targets the following income:

• income from patents or supplementary protection certificates for which a Belgian company or establishment has awarded a licence;
• income from patents or supplementary protection certificates used by the Belgian company or establishment for the manufacture of patented products, either directly or on its behalf.

Research centre
To be eligible for this deduction, the patents must have been totally or partially developed in a research centre operated by the company in Belgium or abroad. When the company has acquired the patents, the deduction of 80% can only apply as long as the company has continued to develop the products or procedures patented in research centres.

Net patent income
Certain costs must be deducted from the income of « acquired » patents, namely :

• payments due to third parties for these patents, if they are deducted from the taxable result in Belgium.
• amortizations recorded during the taxable period on the investment value or cost value of these patents, if they are deducted from the taxable result in Belgium.

New patent income
This deduction shall only apply to the « new » patent income, i.e. the patents that have not generated income before the 1st of January 2007.

The deduction cannot be carried forward
This deduction shall be applied in the tax return, after the deduction of the definitively taxed income (Revenus Définitivement Taxés - RDT) and before the deduction for risk capital. Any excess deduction may not be carried forward to subsequent tax years. It is important to note that this deduction is not reflected in the accounts and therefore will not have an impact on the company’s capacity to distribute a dividend.

Deduction of the fixed quota of foreign tax (QFIE)
The deduction of the fixed quota of foreign tax from the patent income eligible for the new deduction is determined on the basis of the foreign tax effectively withheld up to the limit of the Belgian tax on this same income.

Formalities and entry into force
To be eligible for the deduction for patent income, the company will have to enclose with their tax return a statement whose model is yet to be determined. This deduction enters into force as from the 2008 tax year.

09/05/2007
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