Fueling the Future: Government’s Green Investment Deduction Reform Boosts Sustainable Businesses

Chamber passes new deduction for environmentally friendly investments

The government has approved a new reform proposed by Minister of Finance Vincent Van Peteghem (CD&V), which aims to accelerate the energy transition. Starting in 2025, companies will be able to deduct up to 40 percent of their green investment costs from their profits. This reform completely overhauls the investment deduction system and includes a basic deduction for individuals and small companies, a ‘technology deduction’ for patents and research and development at 13.5 percent, and a thematic deduction for green investments at 40 percent for SMEs and 30 percent for larger companies.

The new thematic deduction encompasses investments in efficient energy use, renewable energy, CO₂-free transport, and environmentally friendly investments like recycling systems. This reform is seen as a significant step towards encouraging sustainable investments in the future. The House approved the reform on a Thursday evening, marking its passage into law.

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