The Law of 9 February 2017 has replaced Belgium’s patent income deduction regime with a BEPS-compliant innovation income deduction regime effective 1 July 2016. Up to 85% of qualifying innovation income is allowed as a tax deduction. The taxpayer’s innovation income is limited to innovation income that has a sufficient nexus to Belgium. Pursuant to the CIT Reform Act of 25 December 2017, effective 1 January 2020, the actual CIT Rate on qualifying innovation income can be as low as 3.75%.