R&D Tax Incentives in the Netherlands

The Netherlands is strong internationally in the Agri-Food, Chemicals, Creative Industries, Energy, High-Tech, Horticulture, Life Sciences, Logistics and Water industries. It ranked as number 3 on the Global Innovation Index (GII) 2017, just ahead of the United States.

Companies fund almost half of R&D work in the Netherlands including research undertaken by universities and research institutions. Additionally, the central government funds around a third of R&D and aims to make the Netherlands one of the top five knowledge economies in the world by 2020. Specific R&D Tax Incentives include the R&D Tax Credit (WBSO), Innovation Box and Innovation Credit.

These incentives are governed by the Research and Development (Promotion) Act and the Dutch government compensates businesses for a percentage of their R&D costs. In 2015, the scheme funded €769 million in incentives.

The R&D Tax Credit provides a 32% tax credit (40% for startups) for the first €350,000 of R&D expenditure, and 16% for costs exceeding this amount.

The Innovation Box allows companies to benefit from an effective tax rate of only 5% for income from intangible assets created by taxpayers and for which the R&D Tax Credit was received.

The Innovation Credit is a risk-bearing government loan, meant for the development phase of a technically new product or service. Large companies can receive 25% and SMEs can receive 45% of eligible costs up to a maximum of €10 million, with the rest being funded by the company.

Also available is an allowance for Top Syndicates for Knowledge Innovation (TKI). This provides cash grants of 40% for private investment costs for the first €20,000 and 25% for amounts over this.

To find out whether your R&D costs are eligible for these tax incentives, please contact Swanson Reed R&D Tax Advisors.

Photo credit: aronbaker2 via Foter.com / CC BY

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