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Factsheet for measure NL-1994-1/2681 – measures in Netherlands
|Country||Netherlands , applies nationwide|
|Time period||Open ended, started on 01 January 1994|
|Context||Restructuring Support Instruments|
|Type||Legislations or other statutory regulations|
Supporting businesses to stay afloat
– Access to finance
|Author||Thomas de Winter (Panteia) and Eurofound|
|Measure added||23 June 2022 (updated 26 October 2022)|
The overall objective of the WBSO is to increase R&D in the Netherlands by reducing taxes on wage and salary costs for staff working on approved R&D. Increased R&D is also expected to increase the competitiveness of enterprises and the development of knowledge and technology are expected to generate positive external effects, ensuring that social benefits are greater than private benefits. By making the measure widely available, the aim is to drive the development of an innovation culture in the Netherlands.
The measure is targeted at entrepreneurs and research institutions in the Netherlands planning to undertake R&D for commercial purposes. The enterprise can be of any size and can be working in any business field. The WBSO distinguishes between enterprises which employ staff and withhold payroll taxes (‘inhoudingsplichtigen’) and are subject to company taxation; and the self-employed (working on R&D for at least 500 hours per year) who are subject to wage tax (‘belastingplichtigen’). This reflects the differences in the way these forms of business organisation are treated from a fiscal point of view.
WBSO is only available for employees employed by the business (as required by Dutch employment legislation). It cannot be used for temporarily contracted staff, or for outsourced research.
Two types of projects are eligible for WBSO support: development projects which concern the development of technically new (components of) physical products, physical production processes or software; and, technical scientific research, which concerns explanatory research that is technical in nature. These are always based on the principle that the applicant is the party that carries out the work.
Beneficiaries of the measure can deduct the tax benefit in their tax return to the Netherlands Tax and Customs Administration. Companies and research institutions (the latter being treated in the same way as companies – public institutions do not qualify for WBSO) pay less wage tax and lower national insurance contributions, and self-employed individuals can make use of a fixed deduction on income tax. Start-up entrepreneurs benefit from a supplementary credit.
The WBSO has been in operation since 1994. As such it has had an impact on innovation over a long period. Some 80-90% of the enterprises that do R&D in the Netherlands have used it. Its targeted uses and impacts have evolved according to the different phases of the economic cycle. For example, during the post-2008 downswing, the measure helped enterprises to retain R&D staff and capabilities that might otherwise have been made redundant.
The number of companies that used the WBSO in 2020 was 19,678. After an annual decline in the number of companies since 2015, this is for the first time an increase of almost two percent compared to the previous year. The COVID-19 crisis in 2020 therefore does not seem to have had negative impact on the total number of companies that carried out R&D.
Employees in standard employment
Sector specific set of companies
||Does not apply to citizens|
Social partners' role in designing the measure and form of involvement:
|Trade unions||Employers' organisations|
|Form||Not applicable||Not applicable|
Social partners' role in the implementation, monitoring and assessment phase:
Eurofound (2022), Law on the reduction of wage tax and national insurance in favour of research and development work, measure NL-1994-1/2681 (measures in Netherlands), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/NL-1994-1_2681.html
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Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process.