Extension of the wage withholding tax exemption for scientific research personnel
On 25 July 2018, a Royal Decree containing the formalities which should be complied with in order to benefit from the extended wage withholding tax exemption for scientific research personnel is finally published. The over the past year frequently discussed Corporate Income Tax Reform extended this wage withholding tax exemption.
Extended to scientific research personnel holding a qualifying bachelor
Prior to 2018 only scientific research personnel holding a certain doctor or master degree qualified for the exemption, but now the exemption also applies to wages paid as of 1 January 2018 to scientific research personnel holding a qualifying bachelor degree as well. The exemption amounts to 40% of the wage withholding tax due as of 1 January 2018 and will increase to 80% as of 1 January 2020.
Overview of qualifying bachelors
The following bachelor degrees qualify for the wage withholding tax exemption:
Academic bachelor degrees (or similar)
- for the Flemish Community: Sciences, Applied sciences, Applied biological sciences, Medicine, Veterinary medicine, Pharmaceutical sciences, Biomedical sciences, Industrial sciences and technology; nautical sciences, Biotechnology, Architecture, Product development;
- for the French speaking Community: Sciences, Engineer, Agricultural science and bio-engineer, Medicine, Veterinary medicine, Biomedical and pharmaceutical sciences, Architecture and urbanism, Industrial sciences, Industrial agricultural science.
Professional bachelor degrees (or similar)
- For the Flemish Community: Biotechnology, Health care; Industrial sciences and technology, Nautical sciences, Commercial sciences and business administration (limited to computer science and innovation);
- For the French speaking Community: Paramedical, Technology (limited to bio-technology, industrial sciences, technology, nautical sciences, product development and computer sciences).
Exemption limited to 25% (50% for SME’s)
The total amount of the wage withholding tax exemption for scientific personnel holding a qualifying bachelor degree is limited to 25% (50% for SME’s) of the total amount of the exemption for wages paid researchers holding a qualifying doctor or master degree. It follows that the exemption only applies to bachelor degrees when the company also employs scientific personnel holding a doctor or master degree for which the exemption can be applied.
The other exemption conditions (research or development project with a certain goal, the registration with the Federal Public Service Science Policy) remain applicable.
KrisDe SchutterAttorney at law Partner
Kris De Schutter is a partner in our office in Brussels and member of Loyens & Loeff’s Employment & Benefits Practice Group. He has extensive experience in alternative (flexible) remuneration, restructuring and change processes.T: +32 2 700 10 13 E: email@example.com
ElenaVan RoeyAttorney at law Associate
Elena Van Roey is a member of the Loyens & Loeff International Tax Services Practice Group and of the Transfer Pricing Team in Belgium. She is an associate in our Brussels office.T: +32 2 773 23 86 E: firstname.lastname@example.org
MaximeVermeeschAttorney at law Associate
Maxime Vermeesch is a member of the Loyens & Loeff International Tax Services Practice Group in Belgium. He co-heads the Start-up team in Belgium and is a member of the German Desk. He focuses on Belgian and international tax law.T: +32 2 773 23 76 E: email@example.com