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Is Belgium really a tax haven for the pharmaceutical industry?



A new report from Oxfam, published on Tuesday, reveals a fiscal optimization case in which Belgium is particularly keen. According to the non-governmental organization the four largest pharmaceutical companies in the world Johnson & Johnson, Pfizer, Abbott and Merck ) disappeared approximately $ 3.5 billion on an international scale between 2013 and 2015 .

In Belgium, the pharmaceutical sector is a major economic sector. But what is the tax attributes this sector has in our country?

A complete legal practice

What this Oxfam report highlights is perfectly legal. It is actually tax optimization, "tax technique", but absolutely no fraud.

On the other hand, NGOs qualify for Belgium for "p aradis fiscal for the pharmaceutical sector" .

Do pharmaceutical companies have a special status with us?

If there is no special tax deduction for pharmaceutical companies, Belgium, plus has the tax benefits that this drug sector benefits particularly. In any case, the opinion of Denis-Emmanuel Philippe, tax lawyer: "It is true that Belgium is a welcome country for pharmaceutical companies. Undoubtedly there are a number of tax benefits that benefit the pharmaceutical sector. and especially the famous deduction for income for innovation, there is also an exemption from withholding tax on wages for researchers, there is deduction for enrichment in research and development, so yes there are certainly many tax advantages ".

For example, if a pharmaceutical company creates a drug, it registers a patent and becomes the owner of that innovation. This allows him to deduct 85% of his income generated by this new drug. It is a lot and it is a special property that is located for Belgium.

Other countries generally offer tax incentives in certain areas to attract business. some are more keen on production; other marketing. For us, research and development: of 30,000 jobs in the pharmaceutical sector in Belgium, 5000 are researchers.

What income loss for the state?

It depends on the views. Oxfam is really talking about a shortage, but does not give exact figures for Belgium.

On the other hand "It is true that companies in the pharmaceutical sector are likely to pay less taxes than SMEs" explains Denis-Emmanuel Philippe, ] "because there are all these tax benefits . " On the other hand, it must be said that if we had a tax law that was much stricter, much more difficult, maybe these drug companies would not come at all in Belgium, would not create jobs, would not make investments in Belgium, it would probably be a loss, so there is a way to see things in two ways. a good medium ".

And that is precisely this other interpretation used as an argumentation of the sector of the drug representatives we contacted.

At Pharma.be, we say that without these benefits, probably a good part of these jobs would not be there … and there would simply be no taxes for Belgium. So we can not talk about the lack.

The sector also utilizes the opportunity to revoke all jobs they create and investments in Belgium, 40 percent of Belgium's research and development investments are made by the pharmaceutical sector.


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