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The primary fiscal instrument with which the Netherlands support R&D in the private sector is the payroll withholding tax credit called WBSO (Wet Bevordering Speur- en Ontwikkelingswerk). Through this government incentive scheme, costs (wages, non-labor costs and expenditures) directly and uniquely in service of R&D will be partially compensated for by the Dutch government. The WBSO has to claimed in advance.

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Netherlands all Companies*

  Tax benefit per calendar year:
32% of withholding tax exemption up to 350,000 in qualifying R&D expenses
(40% for startups)
16% above
Benefit Overview

A WBSO application should describe the planned R&D projects, its associated hours/costs, for a fixed period of minimum three months. When approved, the applicant is granted a total payroll withholding tax credit which it can offset in monthly instalments for the duration of the period covered.

The WBSO is meant to alleviate the costs of two types of R&D projects:

  1. development projects
  2. technical scientific research

The WBSO works by converting part of the eligible R&D project costs (wages, non-labour costs and expenditures) into a payroll withholding tax credit which can be used up in monthly instalment by the recipient.

Eligible Claim Period

The eligible claim period relates to the future (limited to 1 year) with no possibility to claim retroactively.
An eligible WBSO period covers at least three months (within the same calendar year) and is at most one full calendar year. The application has to be introduced at the latest on the day before the period during which the
eligible R&D costs are made. Applicants can introduce a maximum of four applications per calendar year. An application period cannot bridge different calendar years. There is no limit on the number of R&D projects (and thus
the total eligible costs) that are taken into account in a WBSO period.
Historical Background

The WBSO legislation went into effect on January 1st 1994 with a budget of about 95 million EUR vs 1 438 million EUR in 2021. Its primary benefit is the reduction of payroll costs associated with R&D projects. The WBSO in its
current form is the result of the 2016 merger of the former withholding payroll tax credit for R&D wage costs (also called WBSO) and the R&D tax allowance for non-labour related R&D expenses (called RDA). As of January 1st 2020
applications can be submitted one calendar day before the start of the period in which R&D costs are incurred (vs 1 month until December 2019).
Application Process

The WBSO application process works via an online portal (eLoket) and is fully digitalized. As of 1st of July 2021 authentication requires each applicant to log in using level 3 authentication. On the portal, applicants can follow their ongoing applications as well as their historical granted applications. The digital application consists of three parts: identifcation of the applicant, period of application and description of the projects, estimation of the R&D hours and expenses.

Applications are evaluated by advisors of the Rijksdienst voor Ondernemend Nederland (RVO).

For approved WBSO applications an extensive administration has to be kept such as timesheets identifying and differentiating the actual R&D hours spent (updated at least every two weeks) as well as project documentation proving the execution of the project according to the approach laid out in the application.

Finally, in the first quarter of year N each recipient of a WBSO tax credit has to submit a report via the online portal detailing the actual R&D hours and expenses incurred during the WBSO period. If the reported actuals are at least 10% lower than the estimates in the initial application, the recipient will receive notice for a rectification equal to the difference.

In case a WBSO application is denied, the applicant can introduce an official objection to the trade and industry Appeals Tribunal.

Regulating Body Policies

The Rijksdienst voor Ondernemend Nederland (RVO) is an executive body of the Dutch Ministry of Economic Affairs and Climate Change and is tasked with evaluating the WBSO applications and performing (on site) inspections on recipients to check whether sufficient documentation can be shown to prove the projects were actually executed.
Eligible Costs
  • Payroll costs of employees working on the R&D projects ongoing during the WBSO period in the application.
  • R&D related non-labour costs and expenses for which the applicant can choose for two regimes: the first regime is an overhead model in which an allotment for non-labour costs and expenses is calculated with R&D person hours is used as a cost driver. In the second regime the applicant can use invoices and quotes to prove incurred costs and thus ask for reimbursements via the WBSO.
Issues to Consider The WBSO applications are primarily evaluated on the technical/scientific challenges and uncertainties by advisors with STEM backgrounds and working experience in a relevant sector. Be prepared to answer detailed and in depth
technical questions on each R&D project in the application.Applicants are expected to keep detailed and extensive administration for all R&D projects which are part of an approved WBSO period.

Applications can be submitted in Dutch or in English.

No retroactive claims are possible.