From January 1, 2025, new rules for investment deductions will apply in Belgium. Three of the four investment lists for increased thematic deductions have been published in the Royal Decree of December 20, 2024: the energy investment list, the transport investment list and the environmentally friendly investment list. In this article, we take a closer look at the energy investment list and its implications for SMEs.
What is the energy investment list?
The energy investment list lists investments eligible for tax benefits because of their contribution to energy savings and sustainable energy production. Different deduction rates are set for the self-employed, small and large companies, depending on the nature of the investment:
- Ordinary basic deduction: 10% for all investments that are not excluded based on the climate and environmental exclusion list.
- Thematic deduction for energy investments: up to 40%.
- Technology deduction: 13.5% for patents and environmentally friendly investments in research and development.
Which investments are eligible?
The energy investment list is included in the Income Tax Code and specifies which assets are eligible. This includes investments in:
✅ Renewable energy production, such as solar and wind energy.
✅ Energy conservation in buildings and facilities, including insulation and efficient heating systems.
✅ Energy recovery and reuse, e.g., heat and cold storage.
✅ Electrification of industrial processes to replace fossil fuels.
✅ Flexible energy use, such as electrical and thermal energy storage.
Note that investments must usually be made in existing buildings or installations, and an energy study or audit must often be conducted. Investments under €1,000 or with a payback period of less than three years are excluded.
What does this mean for your business?
Increased deduction rates allow companies to save significantly on taxes when they invest in energy-efficient technologies. However, for large companies, a project’s internal rate of return cannot exceed 13% after taxes.
In addition, investments that exceed a certain amount of government support require approval from the European Commission. This prevents distortion of competition within the European market.
Conclusion
The new investment deduction encourages companies to invest in renewable energy and energy efficiency. By investing smartly, the self-employed and corporations can not only reduce their carbon footprint, but also gain tax benefits.
Want to know if your investments qualify? Contact us and find out how we can help you take full advantage of these tax benefits!
