Corporate Income Tax Incentives
In this article, we will mention the most important tax incentives of the Dutch market. Tax incentives provide extra tax breaks on the profit of a company.
The Netherlands does not have any tax holidays or lower rates for new companies, for example, the united states of America do have these kinds of tax holidays.
In this article we will discuss the following Dutch corporate income tax incentives:
Small scale investment deduction;
Research and development;
Allowance for public-private partnerships in R&D
Small scale investment deduction
Companies in the Netherlands that make investments are able to make an extra deduction. All investments higher than € 450 are totalled to determine which percentage of the total amount can be deducted. The deductions are displayed in the scheme. The percentages and amounts can vary from year to year:
Research and development
The Netherlands is also stimulating companies investing in new technologies. Research and development are stimulated in two ways:
Companies investing in research and development on new technology are subsidised in the form of a reduction of the wage taxes that have to be paid on the wages of the employees which are conducting in the research and development of the new technology. The law stating the guidelines is called the WBSO.
In order to obtain this tax incentive, the company has to file an application with the Netherlands Enterprise Agency. https://english.rvo.nl/subsidies-programmes/wbso is the website were more information and the application can be found. Be aware: The Dutch government has set a fixed budget.
A special regime applies for companies investing in new technology. These companies can benefit from an effective tax rate of 7% instead of the usual corporate income tax rates in The Netherlands. This regime applies to the profits made by self-developed intangible assets. The innovation box we be applicable when at least 30% of all profits are made by the new technologies.
Allowance for public-private partnerships in R&D (PPS allowance)
Partnerships between two or more public entities and private partners can be eligible to receive grants of 40% on private investments on the first € 20.000 and 30% over the amount above € 20.000. The company has to fulfil several requirements, for example, the received amount has to be invested in the projects of the partnership.
The Ministry of Economic Affairs and Climate Policy supports risky and innovative projects. These kinds of entrepreneurs usually find it hard to attract capital. The government helps these entrepreneurs to fill this gap in the capital market.
It is a risk-bearing loan for the development of a new product, process or service.
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