De Croo’s government reached an agreement last Friday on greening the investment deduction for companies, De Tieg and De Standard reported today. The basic deduction for the self-employed and small and medium-sized businesses will increase from 8 to 10 percent, among other things. “Companies that invest in their future and thus ensure jobs and growth deserve our support,” said Finance Minister Vincent van Petegem (CD&V).
The federal government wants to support companies with cutting-edge methods to make their operations more sustainable. Therefore, the lists of green investments eligible for the deduction will be updated every three years in the future. The current rules are being changed in three areas.
First, the basic deduction for sole proprietorships and SMEs, which applies to investments in items such as buildings, machinery or transportation, increases to 10 percent. The basic discount can be increased by an additional 10 percent for digital investments in the areas of invoicing, customer relationship management, e-commerce and cybersecurity.
Secondly, there will be a new thematic discount for green investments of 40 percent for sole traders and SMEs, and 30 percent for large companies. Four types of investments are eligible: energy efficient and renewable energy, zero-emission transportation such as electric trucks and vans, other environmentally friendly investments such as more efficient water systems and green digital investments, such as software that monitors energy consumption.
Third, the current deduction for investments in R&D and patents will be renamed the technology deduction. The difference with the past is that there are now fixed ratios that no longer move with inflation. A rate of 13.5 percent applies to the one-time investment deduction for patents and green investments in research and development. If the investment deduction for green investments in R&D is spread over several years, the rate reaches 20.5 percent.
“The system has become much simpler,” answers Dani van Assche, Managing Director of Unizo. The self-employed organization speaks of a good compromise between legal certainty and innovation.
The new scheme will cost the budget an additional 100 million euros and will come into effect from January 1, 2025.
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