The Netherlands encourages innovative business activities as well as engagement in research and development activities through a series of incentives. The innovation box regime is such a programme that has been updated as of 2017. It offers a reduced tax rate to qualifying companies and, starting with the new changes, it also offers benefits for software companies. The experts at our Dutch law firm present the legislation that allows for the beneficial treatment of R&D companies.
The new Dutch innovation box
The innovation box regime
is a programme that allows for the reduction of the corporate income tax on special types of profits, namely those derived from intellectual property
. Those derived from royalty are also included.
The Netherlands has updated this regime as of January 1 2017 to suit the OECD model and the Action Plan 5 regime. The old regime will continue to apply in some cases until 2012, but only for qualifying types of companies. One of the experts at our Dutch law firm can give you more details on this “grandfathering” period as well as how the regime applies to companies that apply for the incentive after January 1st 2017.
For the purpose of the new tax incentive calculation regime, the law differentiates between small taxpayers and large taxpayers in the country. Small companies are those with a turnover from qualifying intellectual property lower than 7.5 million EUR (five-year average). Everything above this amount falls into the other category.
The new regime can also be interpreted in such a manner to allow benefits to software companies in the Netherlands. Qualifying intangible assets also include software programs that can be protected according to the copyright laws in the country.
Tax incentives in the Netherlands
In order to apply for the innovation box regime or other types of deductions, taxpayers will need to submit specific documents to the local authorities.
Foreign investors can consult the Foreign Investment Agency
or talk to one of our lawyers in the Netherlands
for complete information on investment and subsidies.
if you have questions about the innovation box regime and the other types of investment aid.