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Is your company eligible for R&D tax incentives?

Depending on the type of organization, your company may be eligible for one of Flanders’ tax incentives for R&D activities.

Available R&D incentives

  • R&D payroll tax incentive
  • R&D tax credit/investment deduction
  • Special tax status for foreign executives

Find out more about R&D incentives.

  • Innovation premium
  • Tax exemption of regional grants
  • Commercialization following R&D – fiscal ruling
  • Innovation Income Deduction (IID)
  • Notional Interest Deduction (NID)
  • Dividend withholding tax exemption

5 eligible organization types

Type 1: global R&D center

What is it?

  • Performs a wide variety of R&D activities within a company.
  • Owns the IP related to the development of new processes technologies, products, etc.

Which incentives apply?

  • All tax incentives above are available to global R&D centers. 

Type 2: Young Innovative Company (YIC)

What is it?

A YIC is a small start-up company that’s intensively engaged in innovation activities, and typically:

  • has a workforce of 50 employees per year on average;
  • has a maximum turnover of EUR 7,300,000 (excluding VAT);
  • its total assets do not exceed the amount of EUR 3,650,000 (except if the workforce average is higher than 100).

A YIC is egible for R&D incentives, if it:

  • has been in existence for under 10 years;
  • was not founded as part of a merger, restructuring, expansion or takeover;
  • earmarks at least 15% of the total costs of the preceding taxable period for R&D purposes.

Which incentives apply?

  • All the tax incentives above are available to YICs
  • Since YICs often engage in R&D activities that do not break even in the first years after investment, they particularly benefit from Flanders’ numerous incentives with an impact on their cashflow or accounting positions – rather than mere tax deductions. 

Type 3: Contract Research Organization (CRO)

What is it?

Especially common in pharmaceutical and biotechnology industries, a CRO is an organization that supports other companies with R&D services, outsourced on a contract basis. Typically, CROs:

  • provide services such as biopharmaceutical and biological assay development, preclinical  and clinical research, and clinical trials management – all of which are potentially eligible to receive R&D tax incentives.
  • will not be the owner of the IP related to their R&D activities.

Which incentives apply?

All the tax incentives above are available to CROs.

Type 4: manufacturing company

What is it?

  • Produces goods for use or sale by means of labor and machines, tools, chemical and biological processing, or formulation.
  • Typically transforms raw materials into finished goods on a large scale.
  • May carry out R&D activities outside its usual manufacturing activities for the purpose of product development, production process optimization, equipment development, etc.

Which incentives apply?

  • All the tax incentives above are available to manufacturing companies.

Type 5: R&D consulting company

What is it?

  • Typically carries out R&D activities for another corporation, as a subcontractor working on a specific R&D project.
  • Does not become the owner of the developed technology, process, product or other types of innovations.

Which incentives apply?

  • All the tax incentives above are available to R&D consulting companies.
  • However, the investment deduction/tax credit will usually not be applicable, since R&D consulting firms will most likely not have an R&D center within their own company for carrying out their R&D activities.