The combination of several focused tax measures makes Belgium one of the most attractive investment locations for biopharmaceutical R&D and manufacturing in the European Union. These measures include:
• companies and branches can substantially reduce the nominal corporate tax rate by a deduction of notional interest on their adjusted equity capital
• the lowest effective European tax rate on income derived from the licensing of patents or the use of patented products (maximum tax only 6.8% and can be reduced in combination with notional interest deduction and other tax deductions)
• a 75% exemption payroll withholding tax for scientific researchers (PhD, engineers and master degrees)
• increased investment deduction and flexible depreciation rules for R&D investments
• refundable R&D tax credit system
• successful ruling practice can confirm in advance how the tax law will apply to investments
• no capital duty (no proportional registration duties in case of capital increase of a company)
• dividend withholding tax exemption generally available on profit repatriation to both European Union and treaty countries