If certain conditions and formalities are complied with, the employer may, in some cases, be exempted from paying to the Treasury part of the withholding tax deducted from the remunerations of the employees he employs. So employers active in the field of scientific research may be granted an exemption when they employ employees holding specific degrees. In this way, scientific research is promoted.
The reduction in tax charges is granted to private companies that pay or grant remunerations to researchers participating in research or development projects or programmes and holding a specific doctoral or master's degree or a degree in civil engineering.
Since 1 January 2018, the exemption has been extended to certain employees with a bachelor's degree. The regulations specify the degrees that open the right to the exemption.
Both the concept of ‘researcher’ and the concept of of 'research or development project or programme' are defined.
Amount of the exemption
For doctors, civil engineers and holders of a master's degree, the exemption from payment of withholding tax has been equal to 80% of the withholding tax deducted from their remunerations since 1 July 2013.
The exemption measure for bachelors was introduced in several stages by the Act of 25 December 2017 on the reform of corporation tax and amounts to 40% of the withholding tax deducted from their remunerations as of 1 January 2018.
How much will the exemption be for bachelors from 2020?
The exemption from the payment of part of the withholding tax will be increased from 40% to 80% for bachelors as from 1 January 2020.
In addition, the amount of the exemption for bachelors is limited to 25% of the total amount of the exemption calculated for researchers holding a specific master's or doctoral degree, or a degree in civil engineering. For companies that qualify as small companies as meant by Article 15, §§ 1 to 6 of the Companies Code for the tax year linked to the taxable period in which the remunerations were paid, the percentage of the limitation is doubled and thus increased to 50%.
The percentage of the exemption is calculated on the withholding tax due on the remunerations of researchers with a bachelor's degree, as laid down by law, and which relate to research or development carried out in the context of one or more research or development projects or programmes.
In order to benefit from this exemption, the employer must complete certain formalities (declarations and nominative list).
Our Legal Partners can help you
In order to benefit from the reduction in tax charges, a number of strict conditions must be met in addition to the formalities. Be sure to contact our Legal Partners (e-mail: firstname.lastname@example.org or by phone on 02/549.30.10). They can help you make a concrete analysis of your situation.
Sources: Article 275³ of the Income Tax Code, Law of 25 December 2017 on the reform of corporation tax, Belgian Official Journal of 29 December 2017.