R&D tax benefits in the Netherlands
By Robin de Raad, Zirkzee Group
The Netherlands is famous for its attractive tax structures as well as the possibility of obtaining certainties in advance from the Dutch Tax Authorities. However, international developments on international taxation issues could have an impact on certain R&D tax benefits. Is it still attractive to establish R&D activities in the Netherlands?
Wage tax deduction (WBSO)
The WBSO is an R&D tax credit which can lower the wage cost for R&D (salary) expenses. Intended to provide entrepreneurs an incentive to invest in research, the WBSO allows companies to benefit from a 32% tax credit (up to 40% for start-ups) of the first EUR 350,000 R&D (wage) expenses and 16% for the exceeding R&D expenses. The WBSO is applicable for qualifying R&D work within the EU performed by employees on the Dutch payroll.
While the WBSO is an R&D incentive, in the developing stage companies with profits on their own R&D products and technology could benefit from a tax exemption under the Innovation Box scheme. In short, 80% of the attributable R&D profits could be tax-free. Effectively the qualifying R&D profits are taxed at a maximum of 5% CIT. In order to apply for the Innovation Box, it is necessary to fulfil the following requirements:
- The applicant develops new technology under the WBSO at its own risk and cost.
- The applicant owns the intellectual property of the developments and technology (IP). For large companies and MNEs, a patent and/or copyrighted software is required.
- The applicant realises financial benefits (profit) with the technologies.
Robin de RaadZirkzee Group, Noordwijk, The Netherlands
T: +31 71 572 49 65
Robin de Raad is a registered tax advisor with an eye for innovative tax solutions for companies and individuals.
Zirkzee Group is the professional partner for financial and fiscal matters. As a proactive, critical and reliable partner, they offer a one-stop shop for all financial, taxation and administrative matters to individuals, small and medium-sized enterprises active in both the profit and non-profit sectors. As a top 75 accountancy and tax law firm in The Netherlands, they enable their clients to focus on their core business. As one of the few firms in The Netherlands, the tax authorities allow them to implement and use the 30% rule immediately based on professional judgment.
Published: Spring 2017 l Photo: totojang1977 - Fotolia.com