120% cost deduction for E-Invoicing with Peppol

Which services qualify for the increased cost deduction?

The Belgian government has introduced a new measure to help companies, including construction companies, with their digitalization. This means that from January 1, 2024, to December 31, 2027, you can benefit from an increased cost deduction for certain services. We will elaborate on this further. The increased cost deduction applies to:

• Subscription costs: For the use of e-invoicing software.
• Consultancy costs: For consulting and support in implementing e-invoicing.
  Note that this deduction does not apply to the depreciation of purchased software.

Who is eligible for the increased cost deduction?

• Small companies: You can enjoy a cost deduction of 120% in income tax for structured electronic invoicing.
• Larger companies: For larger construction companies, there is an investment deduction, which is specifically aimed at digital investments.

What is the difference between a cost deduction and an investment?

• Cost deduction: This is directly related to the costs of electronic invoicing and only applies to small enterprises.
• Investment deduction: This is intended for larger companies and concerns investments that are depreciated over three years. This can relate to assets that promote productivity and growth. From the tax year 2025, there is an increased investment deduction of 20% for digital investments, including software for e-invoicing.

For investments depreciated over three years, there is the investment deduction for digital investments (seeInvestment Deduction). The investment deduction measure specifically targets larger companies. These are companies that meet certain criteria, such as a minimum annual turnover, a certain number of employees, or a specific balance sheet size. The exact definition of ‘larger companies’ can vary, but it generally refers to companies with significant economic impact and substantial investment capacity.

Conditions and limitations

All direct costs related to preparation to meet electronic invoicing obligations are eligible for the increased cost deduction. Are you a large company or looking for an investment? Then you are not eligible for the cost deduction but can benefit from an increased investment deduction of 20%.

To qualify for the increased investment deduction, companies must meet various conditions:

• Type of investment: The investments must relate to assets that directly contribute to the company’s productivity and growth.
• Timing of investment:Only investments made between the start of the 2025 tax year and the end of the 2028 tax year are eligible.
• Documentation: Companies must keep detailed documentation of their investments to justify the deduction to the tax authorities.

This tax advantage is separate from the existing increased investment deduction (see investment deduction) related to the purchase of tangible fixed assets.

Purpose and expected impact

The purpose of this measure is twofold:

• Economic stimulus: By encouraging companies to invest more, the government hopes to promote economic growth Investments in new technologies and infrastructure can lead to higher productivity and competitiveness.
• Employment: More investments can also result in more jobs, as companies may need more staff to utilize the new assets and technologies.

Practical considerations

Companies wishing to benefit from the increased investment deduction should timely evaluate and, if necessary, adjust their investment plans to meet the specified conditions. To enjoy the increased cost deduction, it is also best to start a thorough investigation early. It is also advisable to consult with a consultant to ensure all investments are correctly documented and claimed.

Conclusion

The increased investment deduction for larger companies is a significant measure by the Belgian government to stimulate investments and promote economic growth. This measure, valid from the 2025 tax year to the 2028 tax year, offers a significant fiscal incentive for companies to invest in their future growth and development.

Read the full article on myMINFYN (new Art. 64ter, §1,1° WIB92).
For investments depreciated over three years, there is also an investment deduction for digital investments (see investment deduction).

Source: Subsidiedatabank van Vlaio

Why choose KPD?

At KPD, we understand the unique needs of the construction sector. Our software solutions are designed to streamline and optimize your business processes. With our e-invoicing software, you can easily comply with the requirements of structured electronic invoicing via the Peppol network.

Our services include:

• Implementation: Seamless integration of e-invoicing into your existing systems.
• Consultancy: Expert advice and guidance during the transition to e-invoicing.
• Training: Training your staff to make optimal use of our software.

Benefits of E-Invoicing with KPD

• Efficiency: Faster invoice processing reduces administrative burdens.
• Cost Savings: Benefit from an efficient invoicing flow through structured software.
• Accuracy: Reduces the chance of errors and improves data accuracy.
• Compliance: Comply with the legal requirements for e-invoicing effective from January 1, 2026.
• Experience: Quick onboarding by experienced consultants with specific knowledge of the construction sector.