Patent based income tax reduction

Within the framework of their Base Erosion and profit shifting action plan, the OECD (Organisation for Economic Co-operation and Development) has decided that the Belgian patent based income tax reduction does not comply. Since Belgian has committed to the OECD to become in line with this action plan, the patent based income tax reduction regime will be revised. In a first phase, the regime is just cancelled. This has been done by a law implementing urgent tax rules, which has not been published yet, but which will be retroactively applied as from 30th June 2016. In a second phase, a new tax reduction regime will be installed of which details will become available by the end of this year. This new regime would retroactively come in force as from 1st of July 2016.
In practice, by way of a transition regime, the patent based income tax reduction regime as it exists now, will be applicable up to 30th of June 2021 for income based on patents/licences that were already obtained prior to 1st of July 2016, for income based on patents for which the patent application was filed before 1st of July 2016 and for patents/licenses that were obtained before 1st of July and for which the patented products or methods were further improved.
We will keep you informed as soon as further modalities on the new regime come at hand.