Miscellaneous

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.