Flanders - September 26, 2007 – Flanders offers companies an innovation and fiscally-friendly climate. From the 2008 tax assessment year onwards, a new regulation will come into force, at the federal level, on income from new patents. This measure is one of most generous in Europe.
The tax incentive applies to income derived, since 2007, from new patents. These patents might refer to that firm’s own invention. Or it could be one they’ve purchased but, in such a case, the buyer will have had to make it better somehow, with the development work done in a research center. That center is allowed to collaborate with other partners. And the patent may – except in Belgium – also be applied for through the European Patents Office in Munich.
A company in Flanders is able – via the new incentive – to deduct 80 % of its income derived from patents from its taxable net profit. So anyone who invested EUR 100 in research and then earned EUR 400 in royalties on the back of the ensuing patent is therefore entitled to deduct EUR 320 from his profit. This yields, all told, a saving of EUR 108 in corporate income tax, or slightly more than the initial investment in research.
With this new incentive, Flanders has propelled itself into the lead group of tax-friendly European regions. Nonetheless, a few moot questions remain. What, for example, happens to income that results directly from a competitive advantage that the patent creates? And what about the proceeds from the sale of a patent? Flanders Investment & Trade will gladly answer all these questions. (reported by the Tijd)
Like to know more about the above-mentioned tax incentive? If so, come along to a special seminar, organized by Flanders Investment & Trade, to be held on 13 November next, from 10.00h to 12.30h, in Brussels. For more details, email us at invest@fitagency.be.
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