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Factsheet for measure NL-1994-1/2681 – measures in Netherlands

Law on the reduction of wage tax and national insurance in favour of research and development work

Wet Vermindering Afdracht Loonbelasting en Premie Volksverzekering, Onderdeel Speur en Ontwikkelingswerk (WBSO)

Country Netherlands , applies nationwide
Time period Open ended, started on 01 January 1994
Context Restructuring Support Instruments
Type Legislations or other statutory regulations
Category Supporting businesses to stay afloat
– Access to finance
Author Thomas de Winter (Panteia) and Eurofound
Measure added 23 June 2022 (updated 26 October 2022)

Background information

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. 

Content of measure

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.

Use of measure

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.

Target groups

Workers Businesses Citizens
Employees in standard employment
Sector specific set of companies
Does not apply to citizens

Actors and funding

Actors Funding
National government
National funds

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role Unknown Unknown
Form Not applicable Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

  • Unknown
  • Main level of involvement: Unknown



Views and reactions




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,


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Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process.