Time of notification of R&D projects or programmes: FPS Finance adopts a stricter position

Notification of an R&D project or programme is an essential condition for applying the exemption from advance payment of withholding tax for research and development. As of 1 August 2023, the FPS Finance will adopt a stricter position on the time of this notification.

Context

To qualify for the exemption from advance payment of withholding tax for research and development, the research or development projects or programmes (R&D projects or programmes) must be notified to the Federal Public Planning Service Science Policy (Belspo).

The notification must contain the following information:

• The identification of the person liable for the withholding tax;
• The description of the project or programme showing that its purpose is fundamental research, industrial research or experimental development;
• The scheduled starting date of the project or programme;
• The expected end date of the project or programme.

Position of the FPS Finance

Regarding the time of notification, the administrative position until now has been that the exemption can only be applied from the month of notification of the project or programme to Belspo, even if the start date of the project or programme was before this notification.

Example: a research project runs over 24 months. During the 10th month, the project is notified to Belspo. The exemption can be applied from the 10th month, i.e. the month in which the project is notified. Retroactive application of the exemption from the 1st month (a month in which the project was not yet notified) is not possible.

Stricter position of the FPS Finance as of 1 August 2023

In its decision of 6 January 2023, the Court of Cassation adopts a stricter position than the FPS Finance. The Court states that notification must take place prior to the start date of the R&D projects or programmes.

The FPS Finance follows the Court of Cassation's decision and will adopt a stricter position as of 1 August 2023. In this way, the employers concerned can adapt their internal procedures to this new position.

As of 1 August 2023, notification of an R&D project or programme must take place before the start date of that project or programme. In practice, this means that the exemption will only apply to the remuneration of eligible staff in R&D projects or programmes that have not yet started if these projects or programmes have been notified to Belspo prior to their start date.

Example: a research project starts on 1 September 2023. The project is notified to Belspo on 24 August 2023. Notification of the project took place before the project started. The exemption can be applied to the remuneration of eligible staff participating in the research project.

What about R&D projects or programmes already underway on 1 August 2023?

We make the following distinction:

• R&D projects or programmes already underway that have not yet been notified to Belspo by 1 August 2023: the exemption cannot be applied. Indeed, the condition stipulating that notification must take place before the start date of the projects or programmes applies to all notifications made from 1 August 2023.
• R&D projects or programmes already underway that were notified to Belspo before 1 August 2023: nothing changes. These notifications remain valid even if they took place after the start date of the projects or programmes.

An employer who is eligible for the exemption from advance payment of withholding tax for research and development therefore has every interest in notifying Belspo as soon as possible and no later than 31 July 2023 of R&D projects or programmes already underway that have not yet been notified, providing all legally required information.

We are glad to help you

Do you have any questions about the FPS Finance's stricter position? Or would you like more information on the conditions of application of the exemption from advance payment of withholding tax for research and development? Please do not hesitate to contact our Legal Consultants at GEConsulting@partena.be.

Source: Circular 2023/C/49 on the time of notification for the exemption from advance payment of withholding tax for researchers.