New investment deduction: investment lists published at the last minute
In May 2024, the investment deduction was reformed for all investments made or established as of 1 January 2025. Through a Royal Decree of 20 December 2024, published in the Belgian Official Gazette on 31 December 2024, the legislator clarifies which investments are eligible for the new thematic deduction. In this article, you will find a summary of the published investment lists.
Reform of the investment deduction
With a reform of the investment deduction, the legislator wants to simplify the applicable rules and achieve greater legal certainty for companies and natural persons. This is done by splitting the investment deduction into three "tracks", with a fixed percentage for each category:
- The general track (for natural persons and small companies): a basic deduction of 10%. The basic deduction is 20% for investments in digital fixed assets such as software and equipment for digital accounting systems, digital payment and invoicing systems and e-commerce.
- The targeted track: an increased thematic deduction of 40% for natural persons and small companies and 30% for large companies.
- The specific track: a technology deduction of 13.5% for the one-off deduction and 20.5% for the spread deduction.
Three different types of investments are eligible under the increased thematic deduction:
- Efficient energy consumption and renewable energy
- Carbon-free transport
- Environmentally friendly investments
- Supporting digital investments, related to the three previous types of investments
Do you want to make use of the investment deduction as a taxpayer? Then you must comply with a number of formalities in good time:
- For the basic deduction: mandatory annex 275U or 276U to be added to the tax return;
- Increased thematic deduction: the investment must be on the 'investment list', while you must also obtain a motivated certificate from the competent regional authority and add the annex 275U or 276U to the tax return;
- Technology deduction: you must obtain a reasoned certificate from the competent regional authority and add the annex 275U or 276U to the tax return.
The Royal Decree (Royal Decree dated 20 December 2024) was published in the Belgian Official Gazette of 31 December 2024 with clarifying investment lists for the increased thematic deduction. For each type of investment (with the exception of digital investments), there are separate lists of so-called qualifying investments. In addition, this Royal Decree also contains information about investments that are excluded from the basic deduction.
Conditions for all investment types related to the increased thematic deduction
Thematic deduction for investments in efficient energy consumption and renewable energy
The qualifying investments for efficient energy consumption and renewable energy relate to the insulation of existing buildings and installations, the recovery of heat and cold, reduced energy consumption, electrification and the production of renewable energy.
For this type of investment, there are two additional grounds for exclusion for specific investments:
- Investments that have a payback period of less than three years;
- Investments in fixed assets that have been made by a company that qualifies as a large company in the year in which the investment is made, and has an internal rate of return (IRR) of more than 13%.
In addition, various qualifying investments, such as investments related to ventilation loss or electrification of industrial processes, are subject to a prior energy study or audit. If the investments are not mentioned in the report of the study or audit, they are not eligible for the increased thematic deduction. The report must be no more than four years old.
The relevant investment list can be found via the following link (Annex II, p.4):
Thematic deduction for investments for carbon-free transport
The qualifying investments related to zero-carbon transport cover a wide range of different types of mobility: rail, road, maritime and inland waterways, and charging infrastructure for zero-emission trucks and buses.
What is striking here is the broad basis of investments for everything that has to do with 'active mobility' in the field of:
- Road transport: investments for mobility (such as (electric) bicycles, speed pedelecs, mopeds and motorcycles without CO2 emissions and logistics and transport accessories), together with zero-emission vehicles for freight transport and coaches/buses. In addition, various investments in the purchase or renovation of real estate associated with this (e.g. storage or dressing room) are also eligible;
- Rail transport;
- Sea and inland shipping;
- Charging infrastructure for green hydrogen and for emission-free trucks and buses.
Finally, there are also a number of maximum investment amounts. For example, for 'active mobility', a limit of 1 million euros per investment applies, while that amount is limited to 500,000 euros per investment for zero-emission vehicles for freight transport, as well as buses and coaches.
The relevant investment list can be found via the following link (Annex IIbis, p.9):
Thematic deduction for environmentally friendly investments
The environmentally friendly investments are divided into investments related to resource management, climate and investments to promote the environment. In this type of investment, the focus is strongly on waste reduction, circular economy and recycling and reuse.
The qualifying investments here are rather niche-oriented. For example, there is a separate department for the recycling of textile fibres, and they are also subject to different technical conditions and parameters.
For chemicals in a circular economy, four separate sub-annexes have been published. Because of the strong technicality of these sub-annexes, they have not been included in the list of lists.
The relevant investment list can be found via the following link (Annex IIter, p.13):
Basic deduction: excluded investments
In addition to the various investment lists for the increased thematic deduction, the legislator also published a list for the investments that are explicitly excluded from the basic investment deduction.
As a reminder, the rate of this deduction is 10% or 20% for specific digital investments and can only be applied by sole proprietorships and SME companies.
The main categories of excluded investments are:
- Investments in fixed assets that distribute, store, use fossil fuels for refining;
- Investments in fixed assets that use fossil fuels to produce heat or electricity or power certain vehicles;
- Investments in fixed assets for the production of pesticides or other harmful substances or of products to which these substances are intentionally added;
- Investments in fixed assets for the extraction of minerals from the deep sea;
- Investments used in the context of cross-border trade in waste or waste products, with the exception of non-hazardous waste destined for recycling.
The list of excluded investments can be found via the following link (Annex IIquater, p.19):
Need help assessing the eligibility of new investments?
The published lists provide a good initial basis for companies to assess whether or not investments made are eligible for the investment deduction, and if so, what percentage applies.
Because the majority of investments require strong technical knowledge and some conditions, such as the payback period, have not yet been clearly defined, consultation with your account manager is certainly recommended. At the same time, he or she can assist you in applying for the mandatory certificate from the competent regional authority.
Contact your account manager if you have any further questions about this.
Summary:
- Investment lists for the new investment deduction have been published
- The thematic deduction is 40% for SMEs and 30% for large companies
- The qualifying investments are strongly focused on environmental impact and energy use
- Please note the formalities: for the increased thematic deduction, you must request a certificate from the competent regional authority
- A list of investments excluded for the basic deduction was also published
Author
Roel Van Ransbeke, Senior Tax Consultant
r.vanransbeke@bakertilly.be