Withholding tax payment exemption for research and development
For some years now, the legislator has used the withholding tax (BV) to support
employers with investments that generate employment. The employer withholds the
BV, as usual, but he must transfer only a part of the withheld BV to the tax
authorities. Recently, the exemption from transferring BV for research and
development was loosened.
Employers engaged in R&D
The supporting measure 'exemption from transferring BV for research and
development' actually contains five different (partial) exemptions, depending on
the type of employer.
universities, colleges, the 'Federal Fund for Scientific Research - Fonds
fédéral de la Recherche scientifique (FFWO/FFRS)',
recognized scientific institutions
companies that pay or grant remuneration to researchers who work on research or
development projects or programs implementing cooperation agreements with
universities, colleges or recognized scientific institutions
Young Innovative Companies
companies that pay or grant remuneration to researchers who hold a specific
degree and who are employed in research or development projects or programs.
Here the last category is concerned : commercial companies that employ
researchers in their research or development projects or programs.
Until 31 December 2017, such researchers had to hold a master's or doctorate
degree in a specific field of study.
In 2018, the exemption was extended to researchers holding a professional or
academic bachelor's degree in a specific field of study. In that first year, the
exemption from transferring payment was 40%, but since 2019 the exemption is the
same as for researchers with a master's or doctorate degree, i.e. 80%.
Education is a Community competence: the diplomas that qualify for the transfer
exemption are different for the Flemish and the French-speaking
For the Flemish Community, this includes: PhDs in Applied
Sciences, Exact Sciences, Medicine
Masters (or academic bachelors) in Sciences,
Applied Sciences, Medicine, Pharmaceutical Sciences
As of 1 January 2018, professional bachelors in biotechnology, health care,
industrial science and technology, nautical and commercial sciences, and
business administration (if the program is mainly focused on computer science
and innovation) are also eligible.
In the French-speaking Community, the degrees of doctors and masters in
approximately the same fields entitle the holder to the exemption. The
professional bachelor's programs concern the following fields of study:
Paramedical and Technology (limited to courses that are mainly focused on
biotechnology, industrial sciences, technology, nautical sciences, product
development and computer science).
The payment exemption can only be applied to the BV owed on the salaries of
researchers who hold a professional or academic bachelor's degree in a specific
field of study and who relate to research and/or development carried out in the
context of one or more research or development projects or programs.
researchers have only spent part of their time effectively on research and/or
development, the BV is only eligible pro rata on their salary.
The total amount of the exemption for bachelors may not exceed 25% of the
total amount of the exemption from transferring BV to the salaries of
researchers who hold a master's or doctorate degree in a specific field of
study. If your company is an SME, the limit is 50%.
Because of this limitation, you cannot invoke the exemption if you do not employ
masters or doctors in your research programs!
Suppose you employ 1 master degree in a research project and you
apply an exemption from transferring BV of 40.000€, then the transfer exemption
of the BV on the salaries of employed bachelors cannot exceed 10.000€ in a large
company or 20.000€ in a SME.
Formalities and other conditions
BV's payment exemption is still linked to a number of other conditions (for
example, the research project must be recognized by BELSPO) and formalities (you
will have to submit no less than 3 BV declarations).
It certainly takes some effort to apply the exemption, but it can really be