Extended scope from 2025
The reform of the increased investment allowance scheme at the end of 2024, valid for 2025 and future investments, has broadened the spectrum of eligible investments in sustainable development, while increasing the tax impact, with an increase in the deduction rate from 15.5% to 30% for companies, and even 40% for SMEs, specifically for this theme. In addition to the energy savings already targeted, other themes specific to European environmental objectives (Green Deal) have been added to the panel, in order to support Belgian companies in their efforts and virtuous investments in terms of CO2This is particularly true when it comes to the consumption of natural resources, circularity, de-pollution and the preservation of biodiversity.
Limitation in case of cumulation with regional aids
This welcome broadening of the scope of sustainable development beyond the single, but essential, issue of energy was accompanied, however, by the legislator’s decision to make it impossible to combine the said increased deduction (tax incentive) with regional aid (financial incentive) for the same investments, thus mitigating the good news announced.
This prohibition has been widely commented on by stakeholders, and the incompatibility evoked has remained in the minds and communications of both consultants and regional bodies such as VLAIO, which explicitly takes it up in its guidance.
What the Royal Decrees really say
However, as is customary for this type of scheme, the essential details are set out in Royal Decrees, which also supersede the original provisions.
And anyone who has had the good sense to persevere in reading the rather indigestible Annexes II, II
“In the event that the sum of the tax benefit of the investment allowance claimed for one of the investments referred to in this Annex and the benefit of the other public aid claimed for the investment concerned exceeds 30 million euros […] the application for the investment allowance will be notified to the European Commission for prior approval as compatible State aid. the investment allowance application will be notified to the European Commission for prior approval as compatible state aid.”
As long as we agree that regional aid is indeed “other public aid”, we can deduce that the incompatibility between the deduction for thematic investment and regional aid is lifted, systematically for all the aforementioned investment categories. The only exception to this lifting of the prohibition on cumulation concerns investments specific to the capture and management ofCO2 captured in industry, which cannot benefit from the increased deduction if they have been subsidized at European level.
Good news for companies
As a corollary, the claimed incompatibility of the tax deduction for “sustainable” investments with Belgian regional subsidies is nothing more than a figment of the imagination!
And that’s good news for Belgian companies, especially their finance and sustainability directors, who face complex and often strategic choices when allocating resources to projects that are as costly as they are virtuous.
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