WBSO: Research and Development (R&D) tax credit

This Act provides a fiscal facility for companies, knowledge centres and self-employed persons who perform R&D work.

In this context, R&D means technical scientific research, the development of technologically new physical products or physical production processes (or parts thereof) and the development of technologically new software (or parts thereof). Non-companies qualify only if they perform R&D on the instructions and at the expense of a Dutch company.

Under the Act, a contribution is paid towards the wage costs of employees directly involved in R&D. The contribution is in the form of a reduction of payroll tax and social security contributions and an increase in the tax deductions available to self-employed persons. Applications must be received one month before the start of the period for which these facilities are required.

Research and development means:

• the development of technically new physical products, physical production processes, software or components thereof
• technical-scientific research seeking to explain phenomena in fields such as physics, chemistry, biotechnology, production technology and information and communication technology
• analysis of the technical feasibility of an R&D project you are thinking of launching
• technical research aimed at enhancing your physical production process or software

The level of your tax benefit

If you are eligible for the WBSO, you will receive a contribution towards the wage costs of employees carrying out R&D. The tax benefit consists of a reduction in wage tax and social security contributions (premie volksverzekeringen) paid for these R&D employees. In 2012 this so-called R&D deduction will be 42% of the first 110.000 euro in R&D wage costs and 14% for the remaining R&D wage costs. If you are a start-up company, it is as much as 60% of the first 110.000 euro.

If you are a self-employed entrepreneur (sole trader) and spend at least 500 hours on R&D within one calendar year, you are eligible for an income tax deduction. A self-employed entrepreneur (sole trader) who employs staff may be eligible for both a reduction in wage tax and social security contributions (premie volksverzekeringen) for his staff and for R&D tax relief for him or herself.

Your R&D project must meet the following conditions before you can apply for the WBSO:

• the proposed R&D activities take place in your own company
• the technological development is new to your organisation
• the development is accompanied by technical problems and
• the R&D work has yet to take place (in other words, you must always submit a WBSO application in advance)

More information?

If you have any questions, please call the WBSO helpdesk on (+31) 88 602 35 54.
For questions about online applications and certificates, please contact the e-services helpdesk on (+31) 88 602 59 99.

Tax and Customs Administration R&D deduction

On www.belastingdienst.nl you can find information on wage tax and social security contributions and R&D deduction. For questions about the settlement, please contact the Tax and Customs
Administration helpline on (+31) 800 05 43 or your regional tax office. This website features the address and phone number of your regional tax office.