Patent income deduction to be replaced by innovation income deduction

Submitted by Thomas Baudewijn on December 21, 2016

Back in 2007 the patent income deduction (PID) was introduced in Belgium, a fiscal benefit intended to stimulate innovation in Belgian enterprises. This system allowed a deduction of 80% of the gross income resulting out of a patent, thereby reducing the effective tax rate to a maximum of 6,8%. This could be cumulated with other benefits such as notional interest, allowing to even further reduce fiscal pressure.