Key takeaways
- Tax depreciation spreads the cost of a fixed asset over its actual economic useful life (art. 61 CIR 1992).
- The declining-balance method has disappeared for any asset acquired since 1 January 2020 (art. 196, § 3, CIR 1992).
- The pro rata temporis rule for the first instalment now applies to every company, small or large.
- Small companies within the meaning of art. 1:24 of the CSA keep more flexible treatment for ancillary costs.
A machine bought for 20,000 euros cannot be expensed in full on the day of purchase: its cost is spread over the years during which it serves the business. That is the principle of tax depreciation, and the corporate tax reform passed at the end of 2017 changed the rules for every Belgian SRL from 2020 onward. This article sets out what is still possible, what has disappeared, and how to calculate an instalment without getting it wrong.
The legal principle of depreciation
Article 61 of the Code des impôts sur les revenus 1992 (CIR 1992) allows depreciation to be deducted as a business expense, on one central condition: the instalment must match the asset's actual loss of value during the taxable period, taking into account its probable economic useful life. An SRL cannot therefore depreciate a computer over fifteen years or an industrial building over three years without justifying that period.
Two methods historically coexisted: straight-line depreciation, which spreads the cost in equal instalments, and declining-balance depreciation, which concentrated the deduction in the early years. The 2018 reform ended that choice for new investments.
Straight-line or declining-balance: what changed since 2020
The law of 25 December 2017 reforming corporate income tax inserted article 196, § 3, into the CIR 1992. Since 1 January 2020, this paragraph excludes the declining-balance regime of the former article 64 of the CIR 1992 for any fixed asset acquired or created from that date. Only the straight-line method remains open to new investments.
| Before 1 January 2020 | Since 1 January 2020 | |
|---|---|---|
| Straight-line method | ||
| Declining-balance method for a new asset | ||
| Full instalment in year 1 (small company) | ||
| Pro rata temporis mandatory for every company |
In practice, an SRL buying professional equipment today can no longer choose the declining-balance method to accelerate its tax deduction in the first years. It depreciates in equal shares, over the asset's economic useful life.
The pro rata temporis rule for the first instalment
Before the reform, a small company within the meaning of article 1:24 of the Code des sociétés et des associations (CSA) could deduct a full instalment in the very year of acquisition, whatever the purchase date within the financial year. Article 196, § 2, of the CIR 1992 put an end to that flexibility: for any financial year starting on or after 1 January 2020, the first year's instalment is calculated pro rata to the actual number of days between the asset's entry into service and the year end.
depreciation period
example: equipment worth €20,000 depreciated straight-line
full instalment
€20,000 / 5 years
1st instalment, pro rata
entry into service on 1 July, financial year closing on 31 December
In this example, the company puts the equipment into service on 1 July and closes its financial year on 31 December. The full instalment of 4,000 euros is reduced pro rata to the 184 remaining days out of the year's 365 days, giving roughly 2,016 euros in the first year. The remaining balance is made up at the end of the schedule, in a sixth, partial instalment.
Ancillary costs and intangible assets
Costs linked to acquiring a fixed asset (notary fees, registration duties, commissions) follow a distinct rule depending on the company's size. A small company within the meaning of article 1:24 of the CSA (at most one of three thresholds exceeded: 50 workers, 11,250,000 euros of turnover excluding VAT, 6,000,000 euros of total balance sheet) may deduct these costs in full in the year of purchase, or spread them at the same pace as the depreciation of the main asset. A company exceeding more than one of these thresholds must spread them.
For intangible assets such as goodwill or an acquired client base, Belgian accounting law requires depreciation over the asset's actual useful life when that life can be reliably estimated. When it cannot, that period is capped at ten years maximum (art. 3:89, § 1, of the Royal Decree of 29 April 2019 implementing the CSA). Either way, the period chosen must be justified in the notes to the annual accounts.
Before setting a depreciation schedule
Check the asset's actual economic useful life
not a period chosen to optimise the current year's tax bill
Calculate the pro rata temporis of the first instalment
from the date of entry into service, not the order date
Confirm whether the company remains a small company within the meaning of art. 1:24 of the CSA
this status determines the treatment of ancillary costs
Document the schedule in the notes to the annual accounts
useful in the event of a tax inspection on the period chosen
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A common mistake: confusing optimisation with justification
A depreciation schedule that is too aggressive, artificially shortening an asset's period to maximise the tax deduction for a given year, exposes the SRL to rejection during an inspection. The tax authorities compare the period used against sectoral practice and the asset's actual use within the business. Computer equipment depreciated over two years remains defensible; a commercial building depreciated over five years is not, without solid justification.
The best protection remains consistency between the accounting schedule, the tax schedule and the asset's observed actual use. A director who documents this choice from the moment the fixed asset is purchased avoids most disputes in the event of a review.
Going further
To place depreciation among an SRL's overall deductible expenses, see deductible business expenses for an SRL. For the accounting obligations that frame the depreciation schedule, see accounting obligations for an SRL in Belgium. To build these charges into your projections, see how to draft an SRL's financial plan.
