On 10 September 2025, the Belgian Ruling Commission published its annual report for 2024. The report, available in Dutch and French, provides insights into key trends, operational developments, and notable decisions in the field of tax rulings.

Focus Innovation Income Deduction

Cases related to the application of the innovation income deduction continue to represent a significant share of ruling applications (126 in 2024) and prefiling requests (165 in 2024).

However, the report also highlights that several applications concerning the innovation income deduction were rejected in 2024 for the following reasons:

• Loss of advance character: A taxpayer had previously obtained a ruling regarding the application of the innovation income deduction, which was about to expire. They applied for a renewal, but only did so shortly before the deadline for filing the corporate income tax return for the 2023 financial year. Although the Commission made efforts to review the late-filed ruling request, the taxpayer submitted the corporate income tax return, including the innovation deduction and annex 275inno, before a new decision was issued. As a result, the Commission was unable to issue a valid ruling, since the requirement that the ruling be granted in advance was not met.
• Avenant rejected: At the beginning of 2023, a taxpayer obtained a ruling confirming the use of the residual profit split method to calculate the embedded royalty for the innovation income deduction. In mid-July 2023, the taxpayer submitted an Avenant after applying for a European patent, seeking confirmation that the innovation income deduction would also apply to this patent. In the same Avenant, the taxpayer requested a change in the transfer pricing method used to determine the embedded royalty. The taxpayer justified this change by stating that the residual profit split had significantly decreased, even though the value of the patent remained unchanged. However, the Commission denied the Avenant. The main reason was that the proposed change in transfer pricing method related to 2022 and the decrease in residual profit was only linked to an increase in expenses, while the Avenant itself concerned the European patent application in 2023.
• Methodological inconsistency: A company requested to change its calculation method for the innovation income deduction from the residual profit method to a cost-plus approach. The Commission rejected this request, emphasizing the importance of methodological consistency. It also noted that the proposed change would have led to a significant increase in the innovation income deduction. Additionally, the nature of the intellectual property and the context in which the original method was chosen were considered incompatible with the new approach.

These cases underscore the importance of timely submission, clear documentation, and consistent methodology when applying for rulings, especially in complex areas like innovation income.

Efficiency gains and staffing challenges

A positive development is the decrease in average ruling processing times from 66 days on average in 2023 to 62 days in 2024. However, the report also highlights ongoing staffing challenges. The Belgian Ruling Commission employees are appointed via temporary internal assignments, and they cannot pursue career advancement within the service itself. This structure leads to turnover of experienced staff, which can impact continuity and expertise, especially in complex cases. The planned reinforcement of the service, as announced in the government agreement, is therefore a welcome and necessary step.

Prefiling Meetings as a valued tool

The Commission confirms that the prefiling meeting system is highly appreciated by potential applicants. These meetings allow companies to assess the feasibility and completeness of their case before submitting a formal request, increasing the likelihood of a successful ruling.

Key takeaway

For companies, it remains crucial to submit ruling applications in a timely and well-prepared manner, especially for complex tax matters such as transfer pricing and innovation income deductions. To ensure that a ruling can be issued before the corporate tax return is filed, the Belgian Ruling Commission explicitly requests that applications (or prefiling requests) related to transfer pricing or the innovation income deduction for the calendar year 2025 (assessment year 2026) be submitted no later than 30 November 2025. For companies with a non-calendar fiscal year, the deadline is at least eight months before the filing date of the corporate tax return.

In line with this focus on timely submission, the Belgian Ruling Commission has published a new procedure for renewing existing rulings that include a transfer pricing method. This procedure is also relevant for rulings concerning the innovation income deduction, as these typically rely on a transfer pricing-based allocation of profit between group entities. Renewal requests must now follow an official template provided by the Commission.

Authors : Tine Slaedts, Stefanie Van der Straeten