Investment deduction: why most companies are not making full use of its potential

Three distinct forms of investment deduction

Today, three approaches must be distinguished. Each applies to specific investments, all of which must relate to new tangible or intangible fixed assets used exclusively for the company’s business activities and depreciated over a period of at least three years.

Basic investment deduction

The basic investment deduction is available only to SMEs. It allows them to reduce the taxable basr by 10% of the capitalized amount . At a corporate income tax rate of 25%, this represents an effective saving of 2.5% on the investment. For certain digital investments, the deduction rate may rise to 20%, corresponding to an effective saving of 5%.

This is typically the form most companies already apply through their accountant, often assuming that they are making full use of the incentive. However, two other categories also exist and may offer substantially greater benefits.

Thematic investment deduction

The thematic investment deduction is available to both SMEs and large companies and covers investments that support the transition towards more sustainable business operations. To prioritise specific transition objectives, the government has published a list of eligible investments divided into four broad themes, significantly wider in scope than those historically covered by the former regime :

• Reducing energy consumption in industry and buildings, including measures to limit heat loss, electrify processes, install renewable energy sources and develop battery storage facilities;
• Environmental protection, including initiatives that promote recyclability, reduce raw-material consumption or limit waste generation;
• Zero-carbon mobility, including alternative transport solutions such as rail and maritime transport, zero-emission trucks and certain hydrogen-based alternatives;
• Digital solutions directly linked to sustainable investments falling within the three categories above.

The thematic investment deduction can significantly increase the tax benefit associated with qualifying investments. Since 2026, the applicable rate has been 40% for all companies, representing an effective saving of 10% on the investments made. This means that the deduction rate can be four times higher than the standard basic investment deduction.

What if the company does not pay tax in the year in which the investment is capitalised? This does not prevent the benefit from being used: it can be carried forward and applied at a later stage when it becomes more advantageous for the company.

Technology investment deduction

When a company capitalizes its Research and Development activities or the costs incurred to obtain patents, it may benefit from the technology investment deduction. The deduction rate is 13.5% when applied in a single year, or 20.5% when applied on a spread basis.

Each investment deduction comes with its own procedure

For the basic investment deduction, the process is straightforward: the investment amounts are reported directly in the tax declaration and the deduction is applied automatically. It is therefore unsurprising that this form is often already handled directly by accountants.

The other two regimes can offer greater tax benefits, but they also involve more extensive procedural requirements. For both the thematic and technology investment deductions, a technical file must be prepared, submitted and defended in front of the competent authority in the relevant Region in order to obtain a certificate. The file includes financial information as well as technical data demonstrating either the R&D nature or the sustainable characteristics of the investments concerned.

Without this certificate confirming the eligibility of the investments, the increased rates cannot be applied, as the certificate must now be attached to the tax declaration. It is also important to note that the only one type of deduction can be applied for a defined investment. The different investment deductions cannot be combined for the same investment, for example by applying both the basic and thematic investment deductions. The most appropriate regime should therefore be assessed in advance in order to maximise the potential tax benefit.

In terms of timing, technical files submitted with a view to obtaining a certificate must generally be filed no later than three months after the end of the fiscal x year of the company. However, for tax year 2025, an exceptional tolerance introduced alongside the new regime allows companies to submit their file until 31 December 2026. This creates a unique opportunity to secure additional tax savings in a challenging economic environment.

Additional considerations under the new investment deduction rules

The new investment deduction regulation of 2025 introduced a number of additional requirements and specific conditions, making the certification process more complex in many cases. Some important points to take into account include the following :

• The same investment may benefit from both a subsidy and the thematic investment deduction. Conditions nevertheless apply to the overall profitability of the project when combining aid, and the specific rules governing the relevant subsidy must also be taken into account;
• The thematic investment deduction can be carried forward, and the 40% rate applies to all companies from tax year 2026;
• Certificates can be obtained to validate a completed sustainable investment, while recognition certificates may also be obtained during the investment phase, providing greater certainty regarding the legislation that will ultimately apply;
• For many thematic investments, an audit must have been carried out. Its purpose is to demonstrate, through a study performed before the investment by a competent entity or individual, the project’s limited profitability (IRR < 13%) and to quantify precisely the associated reduction in energy consumption;
• For thematic investments capitalised in 2025, an additional deadline until 31 December 2026 is granted for submitting a file to the competent authorities. From tax year 2026, the general rule requiring submission within three months after the end of the tax year applies again.

Conclusion

The investment deduction is far more than a standard tax benefit. In its thematic or technology forms, it can offer a significant opportunity to reduce your company’s tax burden while supporting future investments and strategic projects. Given the increasing complexity of the rules and the deadlines that must be met, expert support can be decisive in ensuring that these potential savings are not overlooked.

Would you like to find out whether your investments qualify for the thematic or technology investment deduction? Contact our experts for an initial tailored assessment and start maximising the return on your investments today.