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Partial retention tax exemption on research and development

Tax benefits for investment in innovation

To stay ahead of the competition your company invests in research and development (R&D). Because standing still is the fastest way to move backwards. But did you know that some innovation projects qualify for partial exemption from retention tax? Benefit from this advantage thanks to the Screening R&D!

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Partial retention tax exemption on research and development
Why choose for the Screening R&D?
  • You get back 80 % of your retention tax. We calculate the exact figure for you.
  • You know what you are doing. Our experts build a complete case.
  • You save valuable time. This is because we draw up an action plan and guide you through the process, from application to administrative follow-up.
  • You have one central point of contact for all departments concerned.
Why partial exemption?

Save up to 80% on your R&D retention tax

The European Union wants her member states to invest 3% of their GDP in research and development. For that reason the Federal government has launched incentives of all kinds, such as partial exemption from the retention tax on innovation projects.

Do you employ personnel on research and development projects in Belgium? You may qualify for this research and development tax incentive.

The concept is very simple: businesses are entitled to keep 80% of the retention tax due on their researchers' salaries. Provided they meet the conditions.

Screening R&D: which impact on your business? Discover it in this video!
For whom and under what conditions?

Who qualify for the partial retention tax exemption for R&D?

The following businesses and institutions are entitled to apply the partial exemption from retention tax for research and development:

  • Companies that take on employees with specific science qualifications: bachelor's degrees, master's degrees, doctorates
  • Small, recently created companies that devote at least 15% of their expenditure to R&D. The qualification requirements are even more flexible for these Young Innovative Companies
  • Universities, colleges and acknowledged scientific institutions
  • Companies in partnership agreements with the institutions above

The following conditions apply:

  • You must work in research and/or development
  • It must concern a project or programme covering fundamental research, industrial research or experimental development
  • You should have reported the projects or programmes to the Federal Science Policy service (BELSPO) in advance
  • You must produce time sheets as evidence of the time spent on the project by each research worker

Would you like to know if you qualify for the partial exemption from retention tax? Fill in our simulation form and we will contact you as soon as possible.

How?

How to apply for the exemption from retention tax on research and development?

Does your innovation project meet the conditions above? Check by completing our simulation form and ask our experts for advice. We will submit your project to BELSPO to check wheter you qualify for the exemption.

We will happily walk you through the steps from A to Z:

  • Our preliminary examination informs you at once if your projects qualify. If you don't qualify for exemption, we won't ask for payment. No cure, no pay!
  • We help you build and file a strong case.
  • We help monitor your file's administrative progress.
  • Annual review: we help identify new projects that could qualify for exemption.

FAQ

Frequently asked questions about Screening R&D

1. What activities fall under ‘research’ and ‘development’? And when do they qualify for partial exemption from retention tax payments?

Partial exemption from retention tax payments on research and development was extended in January 2020. As of then an ordinary SME could apply for exemption when setting up development projects. Provided the project satisfied a number of conditions.

It is a misconception that only recognised research institutions and companies in the science sector are entitled to this tax exemption.

Do not miss the opportunity to claim this benefit. Would you like to know if your project qualifies? Do the simulation here.

2. Does the banking and finance sector qualify for exemption from retention tax payments on research and development projects?

Yes, provided the research and development activities in that sector satisfy the conditions.

Exemption from payments applies to ‘businesses’. The sector in which that business operates is not relevant.

So what is relevant, then? The businesses concerned must prove that their research and development projects lead to:

  • The acquisition of new scientific or technical knowledge
  • And/or considerable improvements in processes, systems, services and so on
3. Do holders of a professional bachelor's degree qualify for exemption from retention tax payments on research and development projects?

Yes, provided they satisfy the statutory conditions, holders of a professional bachelor's degree qualify for exemption on their salaries.

4. Can retention tax be reclaimed retrospectively on a current research or development project or programme?

No. Exemption from retention tax payments on research and development can only be granted after you have notified BELSPO of a research or development project.

In other words, it is not possible to reclaim tax for the period before notification. Not even on appeal.

Exemption cannot start until the month in which BELSPO was notified of the project or programme.

For example: if a project commences on 1 January and is not notified until 1 May, it will be agreed by BELSPO on 30 June. Exemption will not apply until 1 May. Under no circumstance will it be possible to reclaim tax from the initial month, in this case 1 January.
5. My development project qualifies for exemption from retention tax payments on research and development. How long will I benefit from this measure?

You will benefit from the measure while your research and development projects are ongoing. You will of course have to satisfy a number of conditions (including qualification requirements).

6. Can I apply for exemption from retention tax payments on research and development in respect of several employees?

Yes, the tax measure applies across each employee. The main point to bear in mind is the qualification requirement. Exemption is also granted based on the time spent on the project.

7. Does the place of employment matter when it comes to partial exemption from retention tax payments on research and development?

No, the research and development activities do not need to be carried out at the business premises where the personnel are employed.

8. Does the benefit of exemption from retention tax payments on research and development apply to the company or the employee?

The benefit of exemption from retention tax payments applies to the employer. Nothing changes from the employee's point of view. The retention tax is withheld from his or her salary as usually.

Would you like to know more about Screening R&D? Contact us
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