The investment deduction is a Belgian tax benefit that lets companies and self-employed people deduct an extra percentage of the purchase price of certain investments from their taxable base. This mechanism, set out in articles 68 to 77 of the 1992 Income Tax Code (CIR 1992), is a powerful tool for cutting the tax burden while encouraging productive investment. For Belgian SMEs, the deduction rates are particularly generous.
What is the investment deduction?
Basic principle
The investment deduction allows you to deduct a percentage of the purchase or cost price of new fixed assets acquired or created during the accounting year from your taxable base. This deduction comes on top of normal depreciation of the asset.
In other words: you deduct depreciation AND an extra bonus (the investment deduction) from your taxable base.
Difference from depreciation
- Depreciation: spreading the cost of the investment over its economic useful life (100% deducted over several years)
- Investment deduction: an additional tax bonus calculated as a percentage of the purchase price (deducted once, or spread out)
Simplified example: you buy a machine for EUR 10,000, depreciated over 5 years on a straight-line basis. SME investment deduction rate: 8%.
| Year | Depreciation | Investment deduction | Total deducted |
|---|---|---|---|
| Year 1 | EUR 2,000 | EUR 800 | EUR 2,800 |
| Year 2 | EUR 2,000 | – | EUR 2,000 |
| Year 3 | EUR 2,000 | – | EUR 2,000 |
| Year 4 | EUR 2,000 | – | EUR 2,000 |
| Year 5 | EUR 2,000 | – | EUR 2,000 |
| Total | EUR 10,000 | EUR 800 | EUR 10,800 |
You deduct a total of EUR 10,800, even though the investment only cost EUR 10,000. The EUR 800 tax bonus further reduces your taxable base.
Investment deduction rates in 2026
Rates vary according to the nature of the investment, the size of the company and the type of taxpayer.
Rates for self-employed individuals and SMEs
| Type of investment | Rate (tax year 2026) |
|---|---|
| Ordinary investments (base SME rate) | 8% |
| Digital investments (cybersecurity, e-invoicing, digital payment) | 13.5% |
| Patents | 13.5% |
| Environmentally friendly research and development investments | 13.5% |
| Energy-saving investments | 13.5% |
| Smoke extraction or purification systems in hospitality establishments | 13.5% |
| Investments in securing business premises | 20.5% |
| Zero-emission vehicles and charging infrastructure | 8% (ordinary rate) |
Rates for large companies
Large companies (non-SMEs within the meaning of article 1:24 of the Companies Code) do not benefit from the 8% base rate. They only have access to the specific investment deductions:
| Type of investment | Rate (tax year 2026) |
|---|---|
| Environmentally friendly R&D investments | 13.5% |
| Patents | 13.5% |
| Security investments | 20.5% |
| Ordinary investments | 0% (no deduction) |
Annual indexation of rates
Investment deduction rates are indexed annually in line with the consumer price index. The rates listed above apply for tax year 2026. Check the updated rates each year on the FPS Finance website.
Which investments are eligible?
General conditions
To qualify for the investment deduction, the investment must meet the following conditions:
- A new tangible or intangible fixed asset: the investment must be new (not second-hand) and recorded as a fixed asset on the balance sheet (not a current expense)
- Acquired or created during the taxable period: the investment must have been made during the relevant accounting year
- Used in Belgium for the professional activity
- Depreciable over at least 3 years: assets depreciated in under 3 years are excluded (article 75, 3 CIR)
- Allocated to the professional activity: at least partly
Excluded investments
Certain investments are expressly excluded from the deduction:
- Motor vehicles and mixed-use vehicles (except utility vehicles and zero-emission vehicles under certain conditions)
- Assets whose use is transferred to a third party (except leasing or specific exceptions)
- Assets not used exclusively for the professional activity (pro-rata applies)
- Buildings acquired for resale
- Assets acquired from a related company, unless the asset never previously benefited from an investment deduction
- Recoverable packaging
Focus: digital investments (13.5%)
The higher deduction for digital investments (article 69, para. 1, first subparagraph, 2bis CIR) covers:
- Digital payment systems (electronic payment terminals)
- Electronic invoicing systems compliant with European standards
- Cybersecurity software and systems (firewalls, professional antivirus, intrusion detection systems)
- Electronic stock management and order-tracking systems
- Integrated accounting and management software (ERP)
Example: your SME buys ERP software for EUR 15,000. The digital investment deduction is 15,000 x 13.5% = EUR 2,025 of extra deduction.
Focus: security investments (20.5%)
The higher 20.5% rate applies to investments aimed at securing business premises:
- Alarm and video surveillance systems
- Security locks, armoured doors
- Security lighting
- Safes
- Anti-intrusion glazing
Caution: to benefit from this rate, the SME must obtain a certificate from the provincial governor or the mayor confirming that the investment meets the security criteria.
Focus: R&D and environmental investments (13.5%)
Investments in environmentally friendly research and development benefit from a higher rate. To qualify:
- The investment must aim to reduce the environmental impact of the activity (lower emissions, energy savings, recycling)
- A certificate must be obtained from the Federal Public Planning Service for Science Policy or the relevant Region (SPW in Wallonia, VITO in Flanders, IBGE/BIM in Brussels)
One-off deduction or spread deduction?
One-off deduction (the default regime)
The investment deduction is calculated in a single instalment on the total purchase or cost price of the investment. It is applied in the tax return for the year in which the investment is made.
Spread deduction (an option for self-employed people and SMEs)
Self-employed individuals and SMEs can opt for a spread deduction instead of the one-off deduction. In that case:
- The deduction is calculated on annual depreciation (rather than the total price)
- The rate is slightly higher: 20.5% of annual depreciation (for R&D investments) or 10.5% for ordinary investments
- The deduction is spread over the asset's full depreciation period
When to choose the spread deduction?
- If your profit for the year is not enough to absorb the full one-off deduction
- If you prefer to spread the tax benefit over several years
In practice, the one-off deduction is generally more advantageous, since it concentrates the tax benefit in the first year.
Carrying forward the deduction when profit is insufficient
SMEs and self-employed individuals: unlimited carry-forward
If taxable profit is not enough to absorb the full investment deduction, the unused balance can be carried forward indefinitely to subsequent years (article 72 CIR).
Example: your SME invests EUR 50,000 in IT equipment. Investment deduction: 50,000 x 8% = EUR 4,000. Your taxable profit for the year is only EUR 2,000 (after depreciation and other deductions). You deduct EUR 2,000 this year and carry forward EUR 2,000 to the next year.
Large companies: no carry-forward
Large companies cannot carry forward an unused investment deduction. The balance is lost if profit is insufficient.
Worked examples and figures
Case 1: freelance graphic designer in Liège
Sophie is a self-employed graphic designer. In 2025, she invests in:
- An iMac Pro: EUR 4,500 excl. VAT
- Design software (perpetual licence): EUR 1,200 excl. VAT
- A NAS backup system: EUR 800 excl. VAT
Investment deduction calculation (8% SME rate):
| Investment | Amount | Deduction (8%) |
|---|---|---|
| iMac Pro | EUR 4,500 | EUR 360 |
| Design software | EUR 1,200 | EUR 96 |
| NAS | EUR 800 | EUR 64 |
| Total | EUR 6,500 | EUR 520 |
Tax saving: if Sophie is in the 50% personal income tax bracket, she saves 520 x 50% = EUR 260 of extra tax thanks to the investment deduction.
Case 2: Brussels web development SME (digital investment)
WebDev SRL invests in:
- ERP software (Odoo Enterprise): EUR 8,000
- A cybersecurity system (firewall + antivirus): EUR 3,500
- Payment terminals for an e-commerce client: EUR 2,000 (for resale, not eligible)
- Ergonomic office furniture and chairs: EUR 5,000
Calculation:
| Investment | Amount | Rate | Deduction |
|---|---|---|---|
| Odoo ERP | EUR 8,000 | 13.5% (digital) | EUR 1,080 |
| Cybersecurity | EUR 3,500 | 13.5% (digital) | EUR 472.50 |
| Payment terminals (resale) | EUR 2,000 | Not eligible | EUR 0 |
| Office furniture | EUR 5,000 | 8% (ordinary) | EUR 400 |
| Total | EUR 1,952.50 |
Corporate tax saving (20% SME rate): 1,952.50 x 20% = EUR 390.50 of tax saved.
Case 3: bakery in Namur (security + energy savings)
Boulangerie Dupont SPRL invests in:
- An alarm system with video surveillance: EUR 6,000
- A low-consumption oven: EUR 25,000
- An electric delivery vehicle: EUR 35,000
Calculation:
| Investment | Amount | Rate | Deduction |
|---|---|---|---|
| Alarm + video | EUR 6,000 | 20.5% (security) | EUR 1,230 |
| Energy-efficient oven | EUR 25,000 | 13.5% (energy saving) | EUR 3,375 |
| Electric vehicle | EUR 35,000 | Not eligible (vehicle) | EUR 0 |
| Total | EUR 4,605 |
Corporate tax saving (20% SME rate): 4,605 x 20% = EUR 921 of tax.
Note: the electric vehicle is not eligible for the investment deduction (vehicles are excluded), but it does benefit from 100% tax deductibility of costs (see our article on the deductibility of car expenses).
How to declare the investment deduction
For companies (corporate tax)
The investment deduction is declared in the corporate tax return (form 275.1) via Biztax. The annex form 275U must be completed with the detail of the investments:
- Description of each investment
- Acquisition date
- Purchase or cost price (excl. VAT if VAT is deductible, incl. VAT otherwise)
- Deduction category and rate applied
- Amount of the deduction
For self-employed individuals (personal income tax)
The deduction is declared in part 2 of the personal income tax return, under professional income. Form 276U must be attached.
Calculation base: excl. VAT or incl. VAT?
- If you are subject to VAT with full deduction rights: the calculation base is the price excl. VAT
- If you are subject to VAT without deduction rights (VAT exemption scheme, exempt taxpayer): the base is the price incl. VAT
- If you are a mixed taxpayer: the base is the price excl. VAT plus the non-deductible VAT
Advantage for exempt businesses: self-employed individuals under the VAT exemption scheme calculate the deduction on the VAT-inclusive price, which increases the deduction base.
Interaction with other tax mechanisms
Investment deduction and notional interest deduction
SMEs can combine the investment deduction with the risk capital deduction (notional interest deduction). However, large companies that opt for the spread investment deduction cannot combine it with notional interest for the same investments.
Investment deduction and the R&D tax credit
For R&D investments, companies can choose between the investment deduction (13.5%) and the research and development tax credit (article 289quater CIR). The tax credit equals 25% of the deduction rate (i.e. 13.5% x 25% = 3.375% of the purchase price) and has the advantage of being usable even in the event of a tax loss.
Investment deduction and depreciation
The investment deduction does not change the asset's depreciation schedule. Depreciation continues to be calculated on the total purchase price, independently of the deduction.
Holding period for assets
Assets that have benefited from the investment deduction must be held for at least 3 years (for self-employed individuals and SMEs) or for the minimum depreciation period. If the asset is disposed of before this period ends, the deduction must be repaid proportionally (article 74 CIR).
Example: you deducted EUR 800 for a EUR 10,000 investment (8%). You sell the asset after 1 year (out of a planned 5-year depreciation period). You must repay: 800 x 4/5 = EUR 640, added back to your taxable base.
Practical tips
- Plan your investments at year end: even a purchase in December gives entitlement to the full deduction (one-off deduction)
- Group your digital investments to maximise the 13.5% rate
- Request the necessary certificates for security investments (mayor) or R&D investments (regional authorities)
- Keep all invoices and proof of purchase for at least 7 years
- Check the indexed rates every year: they change with inflation
- Choose between the one-off and spread deduction based on your projected profit
Official resources
- FPS Finance – Investment deduction: finances.belgium.be
- Form 275U (companies) and 276U (individuals): available on Biztax and Tax-on-web
- Annual indexed rates: published each year in the Belgian Official Gazette and on the FPS Finance website
- FPS Finance Contact Centre: 02 572 57 57
Conclusion
The investment deduction is one of the most accessible and effective tax benefits for SMEs and self-employed people in Belgium. Its strengths:
- A genuine tax bonus: you deduct more than the cost of the investment
- Higher rates for strategic investments (digital, security, R&D, energy)
- Unlimited carry-forward for SMEs when profit is insufficient
- A simple mechanism to implement with your accountant's help
Every productive investment is an opportunity to reduce your tax burden. Keep it in mind when planning your capital spending.
This article was written by the Espero-Soft team for the blog dedicated to entrepreneurs in Belgium. For personalised advice, please consult a professional.
