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Innovation Income Deductions (IID)

A Belgian tax mechanism to reduce companies' taxable base by valorizing income from protected innovations.
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The Belgian tax regime provides specific measures for companies investing in research, development, and innovation. The Innovation Income Deduction (IID) allows for a reduction in the tax burden by valorizing income derived from legally protected innovations.

The Innovation Income Deduction (IID) is a mechanism that allows companies to reduce their taxable base on income generated by their innovations. It aims to encourage the valorization of R&D results developed in Belgium, through a partial deduction applied to net innovation income.

ABV Development assists companies in identifying eligible income, securing its tax treatment, and optimizing the value of their intangible assets.

85%Maximum portion of net innovation income deductible from the taxable base

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Eligible Revenue:

The DRI applies to net innovation income related to protected intellectual assets. These specifically include: net income from patents; income from software licenses protected by copyright, resulting from eligible R&D activities; income from the definitive transfer of intellectual rights originating from eligible R&D activities.

Gross vs. Net Revenue:

Gross revenue corresponds to the turnover directly associated with the innovation. Net revenue corresponds to the gross revenue from which historical and annual development costs of the innovative solution are deducted, and to which the NEXUS ratio is then applied.

NEXUS Ratio:

The NEXUS ratio encourages R&D activities carried out directly by the company, by limiting the deductible portion related to the acquisition of intellectual property rights or to outsourced activities with related companies. Ranging from 0 to 1, it is calculated as follows: (Eligible R&D expenses / Total R&D expenses) × 130%.

How ABV Development supports you

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Frequently Asked Questions about the Innovation Income Deduction

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Do you want to check your eligibility for the Innovation Income Deduction?

The legal framework for the Innovation Income Deduction is complex and requires a rigorous analysis of your R&D income and costs. ABV Development offers its expertise to assess your situation and identify the deduction levers applicable to your intangible assets.