120% cost deduction for e-invoicing: how can you benefit? 💰

The Belgian government is making the mandatory switch to electronic invoicing on January 1, 2026 a bit less painful with an attractive tax incentive. Companies investing in e-invoicing software can temporarily deduct not only 100% but even 120% of the costs. This means that for every €100 you spend, you can deduct €120 in costs.

But how exactly does this measure work? Who is eligible for this benefit and which costs qualify? In this guide, we clearly explain the increased cost deduction so that you can maximally benefit from this tax subsidy.

What is the increased cost deduction for e-invoicing exactly?

The increased cost deduction is a temporary tax measure aimed at encouraging companies to transition to electronic invoicing in a timely manner. Instead of the normal 100% deduction of professional expenses, you may deduct 120% for e-invoicing software.

A concrete calculation example

Suppose you invest €1,200 per year in Cashfeed for complete e-invoicing automation. Normally, you may deduct this €1,200 as a professional cost. With the increased deduction, you may deduct €1,440 (120% of €1,200).

With a corporate tax rate of 25%, this yields an additional tax benefit of €60 (20% of €1,200 × 25% tax rate). This is in addition to the normal tax deduction that you would have had anyway.

Why this incentive measure?

The government realizes that the mandatory switch to e-invoicing represents a financial burden for many businesses. New software, implementation costs, training of staff - it all adds up. The increased deduction aims to partially compensate for these costs and encourage companies not to wait until the last moment.

Additionally, the measure fits within the broader Belgian digitization policy. By promoting e-invoicing via Peppol, the government is preparing businesses for future digital obligations and increasing the efficiency of the economy.

Temporary nature of the measure

It is important to realize that this is a temporary incentive. The increased deduction applies for a limited period to facilitate the initial transition. Once e-invoicing has become the norm, this extra deduction will likely disappear and return to the normal 100% deduction.

Who is this tax benefit intended for? (And who is excluded)

The increased cost deduction is not available to everyone. The legislator has deliberately chosen to target the measure at smaller businesses that are relatively most burdened by the transition costs.

Small businesses and self-employed individuals

The measure is primarily intended for small companies, sole proprietorships, and self-employed individuals. These are the entrepreneurs who often still use traditional invoicing methods and for whom the investment in new software weighs relatively heavier.

Concretely, the increased deduction applies to businesses that meet the criteria of a "small business" according to the Companies and Associations Code. This means that you may exceed a maximum of two of the following three thresholds:

• Average number of employees: 50

• Annual turnover (excluding VAT): €9,000,000

• Total balance sheet: €4,500,000
  
  

Large enterprises miss out

Large companies cannot claim the 120% deduction. The reasoning is that these businesses have more resources and often already have advanced digital infrastructure. For them, the normal 100% cost deduction is considered sufficient.

Public legal entities

Governments, public institutions, and public legal entities are not eligible for the increased deduction. This is logical as they themselves do not pay corporate or personal taxes.

Be cautious near the annual threshold

If your business exceeds the small business criteria during the financial year, you do not lose the benefit retroactively. The question is: did you meet the criteria at the time of the investment? If yes, then you retain the increased deduction for those specific costs.

Which costs qualify for the 120% deduction?

Not all costs related to e-invoicing automatically qualify for the increased deduction. The legislator has established specific criteria.

Software for electronic invoicing

The core of the measure pertains to software specifically intended for sending, receiving, and processing electronic invoices in accordance with legal requirements. This includes:

• Subscription costs for e-invoicing platforms like Cashfeed

• Licenses for Peppol connectivity

• Software for converting invoices to UBL format

• Modules for automatic invoice validation and routing

Implementation and integration costs

The costs to implement and integrate e-invoicing software with your existing systems also qualify. Think of:

• Configuration of connections with your accounting software

• Data migration of existing invoice data

• Testing and validating the e-invoicing workflow

• Adjustments to your ERP system for Peppol compatibility

Training and education

The costs for training your staff in the use of the new e-invoicing software also fall under the increased deduction. This can include both external training and internal training days, as long as they are specifically aimed at e-invoicing.

What is excluded?

Certain costs do not qualify for the 120% deduction:

• Hardware (computers, servers, tablets) - this falls under a separate investment deduction

• General accounting software without specific e-invoicing functionality

• Consulting for general digitization

• Costs that are not directly related to e-invoicing

Mixed software packages: proportional deduction

Many modern platforms like Cashfeed do more than just e-invoicing. They also offer payment automation, expense management, and financial reporting. In that case, you have to calculate proportionally which part of the costs relates to e-invoicing.

The Federal Public Service Finance accepts reasonable estimates based on functionality or usage time. Cashfeed can assist you by providing a detailed cost specification in which the e-invoicing component is clearly delineated.

The fine print: depreciation and investment deduction

For larger investments in software, there are some additional tax aspects to consider to optimize your benefits.

One-time costs versus subscriptions

For subscription costs (like with Cashfeed) it is simple: you deduct 120% of the annual costs in the year you pay them. These costs are not activated but directly accounted for.

For one-time software licenses you purchase, it is more complex. You must activate them on your balance sheet and depreciate them over several{