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Optimisation of the tax incentives for innovation and protection of files

In recent years R&D on behalf of third parties has experienced exponential growth in Belgium, boosted by a shortage of available engineers for the end-clients. But the intensification of competition in the sector means a limited supply of qualified personnel and, indirectly, increases in consultants’ fees. With appropriate measures you can save up to 5% of the wage mass.

Better margins without wage increase

In this sector marked by fierce competition it is vital to know how to use the margins. However, the enterprises in the sector are under pressure, as is evident from the study conducted in the spring of 2018 for the European platform EFCA (European Federation of Clean Air and Environmental Protection Associations):

of the engineering consultancies see the pressure on prices as a major challenge.
think that the stiffening of competition causes a shortage of qualified consultants with the prospect of inflation of the labour costs.

How, then, can talent be attracted (and retained) without affecting the margins?

One key measure is the partial exemption from payment of the withholding tax on wages for researchers. This measure is in force in Belgium for the sector of R&D on behalf of third parties, but such is not the case in all countries. To recall: the enterprises that have R&D programmes and, in that connection, employ researchers with degrees eligible for those programmes may, in certain circumstances, keep 80% of the withholding tax that would normally be paid to the State. The provision consultant researchers entails the difficulty of evaluating the eligible activities and the time that the client will have to spend on those activities.

Other challenges: the protection of the applications

Because R&D activities on behalf of third parties is by nature more difficult to identify than in a standard enterprise (timesheets with the general activities, but not per se the specific R&D activities, confidentiality of the clients’ R&D projects,…), correct implementation of the tax incentives is most important.

According to our information, FPS Finances will run more audits in the Engineering and Consultancies sector in 2019, which means that the tax deduction granted for 2017 may come under pressure.

Ayming’s experts attend to the formalization of the projects, to bring them into compliance with the requirements of the competent authority, thus securing the continued existence of the enterprise.

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