WBSO benefit / R&D Statement Guide

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General Information

1. Benefits of the WBSO / R&D Statement
The Research and Development Promotion Act (Wet Bevordering Speur- en Ontwikkelingswerk, "WBSO") ensures that you (as a sole proprietorship or a corporate taxpayer) can apply with the RVO for an R&D statement and receive a discount on the payroll tax/national insurance contributions and final levy to be paid on the wages of employees who are engaged in research and development (R&D) activities.
The wage tax reduction is 32%* in respect of the first EUR 350 000 in salaries paid to employees (article 23 of the WVA). For wage costs above this threshold, the reduction is limited to 16%.
* The percentage is increased to 40% for start-up companies developing technological products - see a separate section below defining a “start-up”.
The R&D statement and the WBSO qualification may give you another advantage at the point in time when your business becomes operational and revenue generating – the use of the Dutch Innovation Box. Ensuring a valid R&D statement in place is a pre-requisite for the Innovation Box incentive which, if gained, can result in the effective tax rate on qualifying intellectual property income to be as low as 9%.
2. General requirements
R&D statements are issued by the Netherlands Enterprise Agency (RVO), an agency of the Ministry of Economic Affairs, if and when it has determined that the taxpayer’s (ZZP or corporate) activities are sufficiently innovative and the taxpayer employs personnel with regard to these activities.
You can apply for WBSO for:
(article 1(1)(p)] of the WVA)
  • the development of technically new (parts of): physical products, physical production processes or software; or
  • conducting technical scientific (explanatory) research aimed at generating technological knowledge.
Routine development work is not qualified for WBSO. Technical innovation requires the presence of a research element in the project or technical uncertainties or risks relating to the achievement of the required result.

Your WBSO application will need to contain an explicit specification of the technical problem or the bottleneck that you are addressing and of the solution that you have adopted or intend to research.

Starting with a specifc choice of direction, your enterprise will be working to devise new technical principles, methods, or technologies, or further develop an existing technology.

Activities that involve the copying, imitation or reverse engineering of existing technology are ineligible.
The R&D work must involve new technical solutions for the enterprise; it is not relevant whether third parties may have knowledge of the respective topic already. It is important that there are technical risks and uncertainties involved, otherwise no R&D statement will be granted.

In case of software development, it shall be technically new in nature:

It must pivot on the applicant’s actual resolution of sofware-technical botlenecks. The R&D period comes to an end when you successfully demonstrate a new IT-based operating principle. The time spent on describing models, formulating algorithms or describing the architecture when no technical botlenecks are being resolved is not regarded as work on the construction of a technically new sofware.

Further, in order to prove technological novelty of the software the answer to both of the following questions shall be “yes”:

  • Does the sofware incorporate a new data processing-related technological principle?
  • Will you be addressing the technical obstacles in your programming work yourself?
Projects in which sofware is developed to integrate existing components or allow them to work together in a technically new manner are also regarded as R&D projects. Pursuant to a supplementary condition, you will need to have developed the existing sofware components primarily in-house and to have already implemented them in your enterprise.
Qualified software R&D examples:
  • Voice-controlled
    Mobile App
    This business is specialised in building apps for mobile phones. The applicant intends to construct an app that can serve as a voice-controlled search engine. Augmented Reality is involved, in that the user can initiate a search command to search for text information about the user's current surroundings. This search for content can range from information about the history of an area or building to information about restaurants in the vicinity. The business develops the software for both the speech processing on the mobile phone and for the reduction of the smartphone's power consumption.
  • Real-time Machine Sinc App
    This company has purchased two machines for a particular production process. The challenge to a large extent lies in synchronising, monitoring and calibrating both machines in real time. The machine manufacturer is unable to provide any relevant solutions. The company develops software in C to allow for real-time communication.
  • AI-Driven Customer Interaction App
    This business develops bots and Al technologies for the handling of online customer contacts. The company also develops technology designed to process the Dutch language, to manage decision trees and to measure intentions. Backend development takes place in Python, with the company developing software in R for statistical processing.
Qualified tech. scientifc research (TSR) examples:
  • Microbial Corrosion TSR
    This entrepreneur is looking for an explanation to account for unexpectedly rapid corrosion at chemical plants. The company suspects that the corrosion is caused by microbially induced corrosion, but is unable to find any publicly available information on the subject. The entrepreneur carries out chemical, metallurgical and microbiological measurements to test this hypothesis. The company examines what types of corrosion processes are taking place at the plants and how these processes can be impacted. The hypotheses are validated following analysis of the measurements.
  • Microbial Heat Resistance TSR
    This pasta sauce manufacturer is unfamiliar with the way in which microorganisms are affected by heat treatment and alternative preservatives. The company carries out a microbiological study into the cellular mechanisms that come into effect when microorganisms are exposed to heat and alternative preservatives. The study seeks to explain the difference in levels of heat tolerance and tolerances to alternative preservatives of the various types of microorganisms in the pasta sauce.
  • Protein Catalysis Optimization TSR
    This company is conducting research on the operating mechanism of a protein as the catalyst for a specific chemical conversion because this can sometimes be a slow process. In order to determine the 3D structure of the protein and the catalytic effect, the company uses both traditional applications and a deep learning approach The company compares the results of both procedures and on that basis wants to find an answer for the slow catalytic effect.

Further conditions of a qualified R&D project are:

  • Your innovation or research will take place within the EU;
  • Your company is subject to corporate income tax (VPB) (e.g. BV, NV, etc.) and it pays payroll taxes for the employees which are involved into the (future) R&D project;
  • If you are not a corporate taxpayer, then you shall be subject to income tax (IB) in the Netherlands (ZZP/VOF) and you must spend at least 500 hours annually on your R&D project and at least 1225 hours per year – on the activities of your enterprise;
  • You are not a public knowledge institution.

Non-qualified activities

A number of activities is explicitly excluded from the scope of qualified R&D-activities:

  • 1
    market research;
  • 2
    organisational and administrative work;
  • 3
    work carried out outside the European Union;
  • 4
    construction or installation of equipment intended for use in practice;
  • 5
    work relating to the implementation and adjustment of technology, products, processes or sofware, or parts thereof that have been or are to be purchased;
  • 6
    research into the presence of minerals;
  • 7
    performance of policy studies and strategic studies;
  • 8
    organisation and atendance of courses, training programmes and symposia;
  • 9
    analysis and assessment of existing production processes when there is no direct link to the company’s own R&D;
  • 10
    research that compares products when there is no direct link to the company’s own R&D;
  • 11
    work solely on changes to the design or dimensions of products and sofware;
  • 12
    quality control other than the control of the R&D that is carried out, and quality assurance;;
  • 13
    work on structural and installation designs based on existing techniques;
  • 14
    preparations for and the performance of production work;
  • 15
    construction of a pilot plant on production scale or a prototype having evident production or commercial signifcance;
  • 16
    work carried out by your enterprise in connection with the R&D carried out by a third party that cannot as such be deemed to constitute R&D;
  • 17
    work on modifcations of or changes to existing products or processes that are not of technological signifcance;
  • 18
    work on the formulation and modifcation of recipes and the composition of a product that does not result in a technically new operating principle of the relevant product;
  • 19
    formulation and testing on non-technical specifcations;
  • 20
    formulation or determination of functional requirements and preconditions;
  • 21
    formulation and implementation of tests that are not directly and exclusively directed towards demonstrating an operating principle by the R&D tax withholding agent or taxpayer;
  • 22
    any of the following sofware-related activities:
    • Sofware maintenance;
    • Description of a sofware architecture;
    • Adapting sofware for use on another hardware or sofware platform. By ‘platform’ is meant the overall hardware and operating system environment on which information systems are developed (the development platform) or taken into production (target platform).

Non-qualified examples of software development:

  • App based on third party AI-model
    This business develops an application for doctors. The purpose of the information system is to make suggestions regarding medication and treatment. The company collects, assesses and interprets a range of data through the use of machine learning and natural language processing, which is then used as the input for the application. A model is created and trained using techniques such as TensorFlow. This model is then applied in the field.
  • Training in existing technology
    The fact that a development environment is completely new to a software developer and that the developer will need to begin by learning new methods and techniques (first use) is regarded as training and not as qualifed R&D.
  • A machinery dashboard
    This company has purchased a number of machines in order to create a new production process. The company creates a dashboard using C# and uses available APIs for the exchange of data between the machine and the administrative systems.
  • New database
    This company uses the existing technology for the construction of a new information system in which the new aspects are a new database environment and a new network environment. The project is primarily focused on the applicant's design of an application and the achievement of the necessary functionality. The search for the optimum design and most suitable components are not regarded as qualified R&D, as the work is application-oriented rather than technology-oriented.
App based on third party AI-model
This business develops an application for doctors. The purpose of the information system is to make suggestions regarding medication and treatment. The company collects, assesses and interprets a range of data through the use of machine learning and natural language processing, which is then used as the input for the application. A model is created and trained using techniques such as TensorFlow. This model is then applied in the field.

Training in existing technology
The fact that a development environment is completely new to a software developer and that the developer will need to begin by learning new methods and techniques (first use) is regarded as training and not as qualifed R&D.

A machinery dashboard
This company has purchased a number of machines in order to create a new production process. The company creates a dashboard using C# and uses available APIs for the exchange of data between the machine and the administrative systems.

New database
This company uses the existing technology for the construction of a new information system in which the new aspects are a new database environment and a new network environment. The project is primarily focused on the applicant's design of an application and the achievement of the necessary functionality. The search for the optimum design and most suitable components are not regarded as qualified R&D, as the work is application-oriented rather than technology-oriented.

Non-qualified examples of TSR:

  • Preservative Effectiveness Testing
    This entrepreneur wishes to prolong the shelf life of his company's tomato sauce by combining alternative preservatives with heat treatment. The flavour of the product, however, should not be affected. The entrepreneur carries out a series of tests with various alternative preservatives and heating times. The study identifies the impact of the various alternative preservatives and heating times. The entrepreneur determines the treatment for the best product based on these results. Establishing links, relationships or correlations is not regarded as technical scientific research. The entrepreneur has not carried out research into the underlying mechanisms of action in the tomato sauce in order to account for the differences in shelf life.
  • Broad regenerate material testing
    An injection moulding company observes abnormalities in its products when using regenerate instead of new plastic granulate. The entrepreneur has a general idea of what the problem may be. In order to get a better understanding of the conditions in which the problems arise, the company carries out a Design of Experiments (DOE). This allows the company to identify and situate the problem in broader terms, however, no attempt is made to find an explanation for the product abnormalities observed when using regenerate.
  • Optimized Cleaning Efficiency Model
    A food manufacturer plans to conduct research on the quality of the cleaning method for the production installation based on measurement and historical data. The manufacturer wants to be able to determine when cleaning is the most efficient in order to make chemical, energy and time savings. Data scientists will process the data in a model. The model will be used to make predictions on the quality of cleaning and the optimal use of cleaning agents.

3. WBSO request and ongoing administration

Self-employed (ZZP-ers, VOF)

You submit the application digitally to the RVO.
If your application is approved, you will receive the R&D Statement stating the amount of the eligible tax deduction.

R&D administration: you must always record the number of hours you actually spent on R&D work but you don’t have to report them (unless you fall under the 500-hours threshold).

Corporate taxpayers with employees

General requirements
You submit the application digitally to the RVO and provide an estimate of the number of R&D hours that you and your employees in your enterprise will spend on R&D work. If you select a “real-cost” approach (see the sections below), then you also need to state the budgeted costs and expenses allocated to the R&D project in the respective calendar year.

If your application is (partially) approved, you will receive the R&D Statement stating the maximum amount of the tax deduction. If you have received such an R&D statement, you must set up your R&D administration.
R&D administration: you must always report the number of hours (and, if applicable, the costs and expenditures) you actually spent (incurred) on R&D work to RVO.nl, even if this number is zero. You must submit this notification at the RVO website no later than 31 March of the year following the year in which the R&D work took place.
If your actual R&D hours (and actual costs & expenses, if applicable) spent in the previous year exceed those agreed upon in the R&D Statement you will not be able to have the R&D Statement corrected to your advantage. However, in case you spend less R&D time (costs and expenditures) than was allocated, then RVO will send you a revised R&D Statement containing the revised numbers for the amount of hours, and costs and expenditures, if applicable, not used or spent. In this case, you will repay any excess amount of the R&D payroll tax deduction that you have applied in the respective period.

Group companies in a Fiscal Unity. If you are working together with multiple companies within a fiscal unity on a joint R&D project, you can use a single set of R&D records. However, the administrative records must clearly indicate which R&D activities were carried out, and which costs and expenditures were incurred and paid, by each individual company and for each R&D project.
Re-allocation of hours (costs & expenses) between R&D projects within the same year
Within an R&D Statement, you may move R&D hours between approved R&D projects (or move amounts between approved costs and expenditures). For example, if you spend less time on a particular project, you may spend the remaining hours of that project on one or more other projects within the same R&D Statement that require more hours. In addition, within the same calender year, you may also use unrealized R&D hours (and any unrealized amounts of approved costs and expenditures) for an approved project from previous R&D Statement for approved projects from later R&D Statement (not vice versa).

In case you have been granted several R&D Statements use this Calculation Tool for arriving at your reportable hours (costs & expenditures).

(if the link is broken, find the form as follows: www.rvo.nl/wbso/realisatie-melden (submiting actual information))

Check-list for R&D administrative records

For each project, R&D records shall provide a clear and a simple insight into the nature, content, progress (project administration) and scope (time sheet administration) of the R&D activities performed.
Your R&D records shall contain:

1) Time sheet administration

  • Keep track of the days and the number of hours per day that a given member of the staff spent on R&D, as well as the project involved.
  • Ensure conformity with your employee’s leave and sick leave records.
  • Use the Model time sheet form posted here.
    (if the link is broken, find the form as follows: www.rvo.nl/wbso > Na uw aanvraag > Verplichtingen > S&O-administratie bijhouden (R&D administration))

2) Project administration

  • Keep record of the nature, content and progress of the R&D activities carried out within the project.
  • Keep documented evidence to substantiate your records: copies of the meeting documents and reports, drawings, correspondence, photographs of prototypes, test results, measurement reports, calculations, and so on.
  • Ensure consistency with the projects approved by RVO.

3) Administration of costs and expenditures (if applicable)

  • Keep record of the costs and expenditures incurred, the extent of their attribution to the R&D activities, as well as the related payments.
  • If you partially include expenditures under the WBSO, demonstrate how you arrived at your calculations based on the actual (not estimated) registrations made at the time the expense is commissioned until the end of the calender year (see in detail the separate section on the costs & expenses below).
  • Keep documented evidence to substantiate your records: various documents (digital or otherwise) such as quotations, order confrmations, invoices, payment receipts, and so on.
  • Use the Model form (“Input model for costs and expenditures”) posted here.
    (if the link is broken, find the form as follows: www.rvo.nl/wbso > Na uw aanvraag > Verplichtingen > S&O-administratie bijhouden (R&D administration))
  • How to keep your R&D administrative records
    • Keep track of the R&D administration from the start of a project, even if you have not yet received an R&D Declaration.
    • Ensure that your R&D administration complies with statutory requirements as a minimum. Apart from this constraint, you are free to set it up in any way that you wish.
    • File documents for each R&D project in a clear and structured way.
    • Ensure that all documents are given a date and an author.
    • Prepare brief summaries at regular intervals.
    • Keep all documents coming forth from every phase of the project. The end result is not the only important part!
    • Make sure to record your R&D hours within 10 working days.
    • Ensure that the project administration is completed within 2 months after the end of every quarterly period.
    • The administration of costs and expenditures must be fully updated and completed at the time that you submit your statement.
    • Retain your R&D administrative records for at least 7 years.
    • Have your R&D administrative records available at any time when RVO advisers carry out an inspection.
  • Avoid making the following mistakes
    • The administrative records are incomplete, imperfect or not present.
    • Records of the R&D hours were not kept per person, per day and per project.
    • Records of costs and expenditures were not kept by project.
    • The work carried out was not in agreement with the projects approved by RVO.
    • Costs and expenditures have been included in the R&D administrative records which were not requested and approved.
    • In the R&D administration you have included costs and/ or expenditures for project A, while these specific costs and/or expenditures have been requested for and have been allocated to project B.
    • R&D hours worked were declared for projects for which no R&D Statement was issued.
    • R&D hours worked were recorded on days when employees were on leave or sick leave.
    • R&D hours worked by trainees, graduate students or others not on the payroll were included in R&D hours.
    • Costs and expenditures have been included in the R&D administrative records that do not (solely) serve or are directly attributable to the approved projects.
How to keep your R&D administrative records
  • Keep track of the R&D administration from the start of a project, even if you have not yet received an R&D Declaration.
  • Ensure that your R&D administration complies with statutory requirements as a minimum. Apart from this constraint, you are free to set it up in any way that you wish.
  • File documents for each R&D project in a clear and structured way.
  • Ensure that all documents are given a date and an author.
  • Prepare brief summaries at regular intervals.
  • Keep all documents coming forth from every phase of the project. The end result is not the only important part!
  • Make sure to record your R&D hours within 10 working days.
  • Ensure that the project administration is completed within 2 months after the end of every quarterly period.
  • The administration of costs and expenditures must be fully updated and completed at the time that you submit your statement.
  • Retain your R&D administrative records for at least 7 years.
  • Have your R&D administrative records available at any time when RVO advisers carry out an inspection.
Avoid making the following mistakes
  • The administrative records are incomplete, imperfect or not present.
  • Records of the R&D hours were not kept per person, per day and per project.
  • Records of costs and expenditures were not kept by project.
  • The work carried out was not in agreement with the projects approved by RVO.
  • Costs and expenditures have been included in the R&D administrative records which were not requested and approved.
  • In the R&D administration you have included costs and/ or expenditures for project A, while these specific costs and/or expenditures have been requested for and have been allocated to project B.
  • R&D hours worked were declared for projects for which no R&D Statement was issued.
  • R&D hours worked were recorded on days when employees were on leave or sick leave.
  • R&D hours worked by trainees, graduate students or others not on the payroll were included in R&D hours.
  • Costs and expenditures have been included in the R&D administrative records that do not (solely) serve or are directly attributable to the approved projects.
4. Tax Return filing
Self-employed (ZZP-ers, VOF)
  • You include the R&D deduction in your annual income tax return for the year in which the R&D Statement was granted.

  • If you have spent less than 500 hours on R&D, communicate this before the relevant deadline. RVO will then withdraw your R&D Statement. You will no longer be able to apply the R&D tax deduction to your income tax return.

  • Make sure that you satisfy the criteria for being regarded as an enterpreneur for the respective tax year and, in particular, meet the criterion of the minimum number of 1,225 hours spent on your business.
Corporate taxpayers with employees
From the moment that you receive the R&D Statement, you can deduct the respective amount against the tax liability in the remaining wage tax periods (normally, calendar months) of the calendar year.
Re-allocation of deductible payroll tax amounts across payroll tax periods (months)
You may personally determine how much of the allocated amount of an R&D Statement you wish to deduct against the to-be-paid taxes for each tax period. You may therefore deduct the total amount in a particular tax period or based on an allocation that you have chosen across the tax periods. If you have received several R&D Statements, you can add up the amounts allocated. Applying the R&D tax rebate may not lead to a situation in which the wage tax payable over a tax return period is less than zero.
If the R&D tax rebate/credit has not been fully utilised by the end of the period covered by the R&D Statement, you may deduct the remainder in the previous tax periods within the term covered by the R&D Statement in which you paid income tax and social insurance contributions by submiting correction statements. If the R&D tax rebate still has not been fully utilised afer this situation, you may use it in other tax periods within the same calendar year that fall outside the term covered by the R&D Statement.

There is no obligation to base the setlement during the year on the actual hours spent or on any costs and expenditures incurred. Are you spending less R&D hours or costs and expenditures than allocated? In that case, you only need to take action afer the end of the calendar year by submiting a statement of the time spent (and, if applicable, any costs and expenditures) in good time. If necessary, you can then adjust the setlement on the basis of the corrected R&D Declaration issued as a result of your statement.

You can also choose to adjust the setlement during the year on the basis of actual R&D hours spent as well as any costs and expenditures. This method will prevent you from having to pay back too much of the R&D tax rebate afer submiting your statement.
5. Application submission deadline

Self-employed without employees (ZZP-ers, VOF)

  • The application period starts from the date that you submit the application to the end of the calendar year.

  • Your application can cover multiple projects.

  • You can submit an unlimited number of applications per year, there is no maximum.

  • You can submit applications for the current calendar year up to 30 September.

  • If projects run across more than one calendar year, submit an application for the new calendar year.
If you would also like to apply for the WBSO for your employees’ R&D activities, the regulations for companies with staff (see “Corporate taxpayers” section below) will apply.
Corporate taxpayers with employees
Normaly, you can submit your application for an R&D statement up to the last day before the start of the period when you commence your qualified R&D activities (article 22(3) of the WVA).

So, for example, on August 31 for the period of 4 months starting from September 1 ending with December 31.
Anyway, if you want to commence the R&D project in a particular year you have to apply on or before September 30th of that year. Hence, if you apply in September then you apply for 3 months, starting from October 1 until December 31.
6. Timeline for granting the request
In case of a ZZP/VOF without personnel, a decision on the request generally must be taken within 3 calendar months (article 22(3) of the WVA). For corporate taxpayers with personnel, this 3 months counts from the start of the application period (if you opt for a fixed cost approach, as elaborated below). If you have opted for actual costs and expenditures this period is 8 weeks longer.

Against a (negative) decision of the RVO, it is possible to lodge an appeal by submitting a notice of objection, with reasons (relevante artikelen). If the decision on the notice of objection is not in favour of the taxpayer, an appeal can be lodged with the Trade and Industry Appeals Tribunal.
7. When to re-apply for the R&D Statement?
An R&D statement may be requested for a period of at least 3 and at most 12 consecutive calendar months within a calendar year and for at most 3 periods per calendar year (article 22(1) of the WVA).
8. How do you arrive at a benefit?
Self-employed (ZZP-ers, VOF)
Self-employed persons without personnel (ZZP-ers and VOFs) that fall under the income tax (IB) are eligible for the tax incentive if they work at least 500 R&D hours per calendar year and if they spend at least 1225 hours per year on activities of their enterprise (article 3.77 IB). The special category of self-employed “starters” gets an extra deduction (see a separate section below defining the term):
In 2024, the R&D deduction for the self-employed is € 15 551 and the additional deduction for self-employed starters will be € 7781.
The R&D hours corresponding to more than one R&D Statement request made throughout the calendar year are added together for the purpose of calculating the 500-hour threshold test.

Self-employed persons can claim no costs or expenditures for themselves, nor can they elect the fixed sum approach (in contrast to taxpayers employing others (see the section below)). Hence, if you are self-employed and your enterprise employs salaried staff, then the regulations for taxpayers employing others (see the section below) apply to those employees.

In your WBSO application, you can apply for your own R&D work and the R&D work of your employees. When you comply with all the WBSO conditions, you will receive an R&D declaration for you and your employees.
Corporate taxpayers with employees

For companies with employees, RVO.nl calculates the benefit based on the R&D hours specified in the application and:

  • if your R&D personnel two years prior to the request was involved into the WBSO-qualified R&D project you shall submit their BSN number in order for the tax authority to arrive at their average hourly rate (based on the historic payroll tax returns) which would be applied to the estimate of the R&D hours (with a discounted factor of 0,85);
  • a fixed hourly wage of € 29.

In addition, in order to determine deductable costs and expenses for the R&D project for each calendar year you will make a choice between:

  • the budgeted costs and expenses you will incur for carrying out your R&D project;
  • a fixed amount:
    ▪ € 10 per R&D hour for the first 1800 R&D hours,
    ▪ € 4 per R&D hour for all R&D hours above 1800.
You calculate the benefit as follows:
((R&D hours x R&D hourly wage) + (fixed amount or budgeted costs and expenses)) x percentage of the first (32%/40% for start-ups) or second (16%) bracket (whichever applies - the threshold in 2024 is EUR 350 000)
  • Fixed vs. real cost base calculation example
    You submit an application for 2024, comprising 4000 R&D hours. The hourly wage is € 25. You have elected the "fixed sum' approach. You receive your R&D Statement.

    The total R&D wage is € 100 000 (4000 hrs x € 25/hr). The costs-related fixed sum awarded is: (1800 x € 10) + ((4000 - 1800) x € 4) = 18 000 + 8800 = € 26 800.

    The total underlying cost on which the R&D tax withholding deduction is calculated is then € 100 000 + € 26 800 = € 126 800. The R&D tax withholding deduction awarded is 32% of € 126 800 = € 40 576.

    In the event that you do not elect the fixed sum approach, and declare (for instance) costs of € 20 000 and expenditures of € 325 000, then the total underlying costs on which the R&D tax withholding deduction is calculated are € 100 000 + € 345 000 = € 445 000. In that case, the R&D tax withholding deduction awarded is 32% of € 350 000 and 16% of the remaining € 95 000 = € 112 000 + € 15 200 = € 127 200.
Fixed vs. real cost base calculation example

You submit an application for 2024, comprising 4000 R&D hours. The hourly wage is € 25. You have elected the "fixed sum' approach. You receive your R&D Statement.

The total R&D wage is € 100 000 (4000 hrs x € 25/hr). The costs-related fixed sum awarded is: (1800 x € 10) + ((4000 - 1800) x € 4) = 18 000 + 8800 = € 26 800.

The total underlying cost on which the R&D tax withholding deduction is calculated is then € 100 000 + € 26 800 = € 126 800. The R&D tax withholding deduction awarded is 32% of € 126 800 = € 40 576.

In the event that you do not elect the fixed sum approach, and declare (for instance) costs of € 20 000 and expenditures of € 325 000, then the total underlying costs on which the R&D tax withholding deduction is calculated are € 100 000 + € 345 000 = € 445 000. In that case, the R&D tax withholding deduction awarded is 32% of € 350 000 and 16% of the remaining € 95 000 = € 112 000 + € 15 200 = € 127 200.
9. How to get the status of a start-up?
To qualify as a start-up in order to be eligible for an increased payroll tax deduction (40%), the following 5 conditions must be met:
  • 1
    obtain an R&D statement;
  • 2
    receive the benefits of the WBSO;
  • 3
    submit an application (Verklaring De-minimissteun) to the RVO claiming that the EU tax subsidy threshold (state aid de minimis threshold) has not been exceeded;
  • 4
    enterprise has had salaried employees for less than 5 years, or you have been an entrepreneur for less than 5 years;
  • 5
    your enterprise (together with any previous enterpises the activities of which are continued) has been issued R&D Statements for less than 3 calendar years.
10. How to apply the “actual costs & expenses” approach? Which costs and expenses are qualified?
General
First, you shall allocate the disbursements between “costs” and “expenses”.

The term “Expenses” (also “Expenditure” (Uitgaven)) relates to payments in connection with the purchase of new operating assets (i.e. your investments). Costs (kosten) are all other disbursements.

Examples of qualified costs:

  • 1
    purchase of non-durables, materials and parts with which to carry out experiments or make trial batches;
  • 2
    purchase of materials and parts needed for the in-house construction of a prototype having no potential production or commercial value, within the framework of an in-house development project;
  • 3
    costs incurred in arranging for the construction of prototypes that will not ultimately serve a potential production or commercial purpose;
  • 4
    purchase of licences for specific sofware tools or ICT tools required for the in-house development of technically new sofware;
  • 5
    costs incurred in renting equipment or leasing (parts of) buildings used solely for R&D work.

Examples of qualified expenses:

  • 1
    buildings or sections of buildings to the extent that these are directly used for in-house R&D work;
  • 2
    purchase of new equipment or instruments specifcally intended for the construction of models;
  • 3
    preparation of trial batches or manufacture of prototypes that will not ultimately serve a potential production or commercial purpose;
  • 4
    purchase of ICT tools specifcally intended for in-house R&D.

Examples of activities and the associated costs/ expenditures that do not come into consideration for the WBSO:

  • 1
    building a prototype that is likely to have a production or commercial signifcance. This means that the prototype can be used as an operating asset for production or used to provide services to (potential) customers. If it is likely that the prototype can be sold, it has commercial signifcance. Costs for e.g. materials that are used to build the prototype will not be eligible for the WBSO;
  • 2
    market research: activities related to market research are excluded from the WBSO. Consequently, any associated costs are excluded from the WBSO;
  • 3
    applications for and the maintenance of patents: applications for and the maintenance of patents are not deemed to constitute R&D. Consequently, the costs incurred in applying for and maintaining patents do not come into consideration for the WBSO;
  • 4
    preparations for production: all costs incurred in starting up and preparing for production are not covered by the WBSO. Costs incurred in production losses do not come into consideration for the WBSO.
Costs (kosten)
Assume that in your R&D Statement application an “actual costs & expenses” (rather than a “fixed-cost”) approach is selected. In the R&D Statement application you must then describe which costs you believe you will incur as part of the project as well as the associated amounts. Further, in your annual reporting statement, you must report the actual costs incurred and paid for the performance of your R&D activities. These costs will have been recorded in your R&D records in the execution of your WBSO projects. The costs are incurred the moment they are incurred for your R&D work.
The general guidelines for qualified costs are as follows:
  • 1
    You must incur the costs. First of all, the costs must be made at the expense of your enterprise or that of another enterprise which makes part of a fiscal unity with your enterprise.
  • 2
    The costs must be in principle qualifiable. Second of all, the costs must not be excluded by law.

Non-qualifed costs:

  • 1
    wage costs (they are already accounted for in the WBSO deduction formula);
  • 2
    costs of hiring labour (temporary employees, for example);
  • 3
    costs of outsourced R&D research;
  • 4
    depreciation costs, financing costs;
  • 5
    costs incurred by the purchase or improvement of land;
  • 6
    costs and expenditures for an R&D project that has not been approved;
  • 7
    costs forming a remuneration for the disposition of capital equipment for which the applicant (or another entity) was already awarded an R&D Statement.
  • 1
    Qualified costs must exclusively serve the R&D project.
The “All or nothing” approach
Only specific costs that exclusively serve the performance of and are directly atributable to the R&D project are qualified, i.e.:
• you incur costs solely (100%) for the R&D project;
• there is a clear relationship between the costs specifed and the R&D activities carried out.

If you would incur (part of these) costs even if you are not carrying out the R&D project, these costs are not fully atributable to your innovation project and will not be eligible for the WBSO.
Despite the “All or nothing” rule, in a number of cases, it is possible to determine the portion of the total of such costs that is exclusively of service to R&D. Any such determination must be a clear and realistic calculation based on objective data, i.e. based on facts, findings and measurements.

Qualified and non-qualified use

of “All or nothing” approach:

  • Qualified: steel usage in prototype
    A machine manufacturer purchases steel and uses a portion of it in its R&D work on a prototype without user value. The fixed unit price per kilo of steel can be determined from an invoice. By measuring the weight, the machine manufacturer can ascertain how many kilos of steel were used in the prototype.

    The eligible costs can be determined by multiplying the fixed unit price of the steel (€/kg) by the weight of steel used in the prototype.
  • Qualified: market gardener's gas, water and electricity consumption
    A market gardener owns multiple greenhouses. One greenhouse is used exclusively for R&D purposes. The greenhouse in question is metered and the consumption of gas, water and electricity in this specific greenhouse is measured and registered separately. The eligible costs can be objectively determined using the actual consumption in this greenhouse and the unit price of gas (€/m°), water (€/m*) and electricity (€/kWh).
  • Non-qualified: floor stock for laboratory
    A chemical company has a laboratory whose activities include R&D. Materials needed by the lab, such as pipettes and test tubes, are takenfrom the company's general warehouse. The use of the materials for R&D is calculated based on the number of R&D hours relative to the total number of hours worked in the laboratory.

    This cannot be considered an objective calculation. The costs for the materials used may not be determined in this manner and are therefore not eligible.
  • Non-qualified: office building lease costs
    The R&D employees of a company conduct development activities in a leased office building. Non-R&D employees also work in this building. Approximately half of the total number of hours worked by ali employees is spent on R&D. In this case, applying 50% of the lease costs of the entire office building would not be allowed, since the office building does not exclusively serve the purpose of R&D.
Qualified: steel usage in prototype
A machine manufacturer purchases steel and uses a portion of it in its R&D work on a prototype without user value. The fixed unit price per kilo of steel can be determined from an invoice. By measuring the weight, the machine manufacturer can ascertain how many kilos of steel were used in the prototype.

The eligible costs can be determined by multiplying the fixed unit price of the steel (€/kg) by the weight of steel used in the prototype.

Qualified: market gardener's gas, water and electricity consumption
A market gardener owns multiple greenhouses. One greenhouse is used exclusively for R&D purposes. The greenhouse in question is metered and the consumption of gas, water and electricity in this specific greenhouse is measured and registered separately. The eligible costs can be objectively determined using the actual consumption in this greenhouse and the unit price of gas (€/m°), water (€/m*) and electricity (€/kWh).

Non-qualified: floor stock for laboratory
A chemical company has a laboratory whose activities include R&D. Materials needed by the lab, such as pipettes and test tubes, are takenfrom the company's general warehouse. The use of the materials for R&D is calculated based on the number of R&D hours relative to the total number of hours worked in the laboratory.

This cannot be considered an objective calculation. The costs for the materials used may not be determined in this manner and are therefore not eligible.

Non-qualified: office building lease costs
The R&D employees of a company conduct development activities in a leased office building. Non-R&D employees also work in this building. Approximately half of the total number of hours worked by ali employees is spent on R&D. In this case, applying 50% of the lease costs of the entire office building would not be allowed, since the office building does not exclusively serve the purpose of R&D.

General costs, such as rental costs or expenses for gas, water and electricity, are generally not directly atributable to R&D and are not exclusively serviceable to that purpose. Expenses for gas, water and electricity are only eligible if you are able to objectively determine their actual use in relation to your R&D activities. Regarding the calculation of the rental costs of parts of buildings, only specifc areas that are delineated, objectively ascertainable and used exclusively for R&D will be deemed eligible.
First apply — then use. You may only state costs and expenditures that have been applied for (in the respective R&D Statement request) and, to this extent, have been allocated by the RVO. This applies to each project rather than to each application.
First use & pay — then state. In the annual costs & expenses report made to RVO you should only state the actual costs that you have incurred and paid for your R&D activities. The costs are incurred the moment you use them for your R&D work. For example, you cannot include costs in the statement for purchased materials that you have paid for but have not yet used for R&D activities.
Expenses (uitgaven)
Assume that in your R&D Statement application selects an “actual costs & expenses” approach is selected. In the application you must then describe which expenditures (uitgaven) you believe you will incur for the project as well as the associated amounts. You must take into account the expected application of the operating asset for your R&D. You must specify the actual expenditure incurred and paid in the statement, taking into account the part of the operating asset that served your R&D. You must account for this expenditure and the percentage that served your R&D in your R&D administration.
The general guidelines for qualified expenses are as follows:
  • 1
    You must incur the expenses. First of all, the expenses must be made at the cost of your enterprise or that of another enterprise which makes part of a fiscal unity with your enterprise.
  • 2
    The expenses must be in principle qualifiable. Second of all, the expenses must not be excluded by law.

Non-qualifed expenses:

  • 1
    ICT tools for general use;
  • 2
    second-hand operating assets or machines that have been used previously and are assigned a new use come into consideration for the WBSO. Solely new company equipment (or parts of company equipment) that has not been used previously comes into consideration for the WBSO;
  • 3
    investments that are eligible for an Energy Investment Allowance (EIA) or Environmental Investment Allowance (MIA);
  • 4
    equipment, instruments or facilities for R&D to be carried out by third parties.
  • 1
    Apportion the operating assets into those serving R&D (qualified expenses) and non-R&D purposes (e.g. revenue-generation / production).
The atributable portion of the expenditure must be objectively ascertainable and serve the purposes of the R&D. You will need to substantiate this calculation in your R&D records.

Qualified en non-qualified apportion scenarios:

  • Qualified: market gardener's gas, water and electricity consumption
    A market gardener owns multiple greenhouses. One greenhouse is used exclusively for R&D purposes. The greenhouse in question is metered and the consumption of gas, water and electricity in this specific greenhouse is measured and registered separately. The eligible costs can be objectively determined using the actual consumption in this greenhouse and the unit price of gas (€/m°), water (€/m°) and electricity (€/kWh).
  • Qualified: steel usage in prototype
    A machine manufacturer purchases steel and uses a portion of it in its RED work on a prototype without user value. The fixed unit price per kilo of steel can be determined from an invoice. By measuring the weight, the machine manufacturer can ascertain how many kilos of steel were used in the prototype.

    The eligible costs can be determined by multiplying the fixed unit price of the steel (€/kg) by the weight of steel used in the prototype.
  • Non-qualified: office building lease costs
    The R&D employees of a company conduct development activities in a leased office building. Non-R&D employees also work in this building. Approximately half of the total number of hours worked by all employees is spent on R&D. In this case, applying 50% of the lease costs of the entire office building would not be allowed, since the office building does not exclusively serve the purpose of R&D.
  • Non-qualified: floor stock for laboratory
    A chemical company has a laboratory whose activities include R&D. Materials needed by the lab, such as pipettes and test tubes, are taken from the company's general warehouse. The use of the materials for R&D is calculated based on the number of R&D hours relative to the total number of hours worked in the laboratory.

    This cannot be considered an objective calculation. The costs for the materials used may not be determined in this manner and are therefore not eligible.
Qualified: market gardener's gas, water and electricity consumption
A market gardener owns multiple greenhouses. One greenhouse is used exclusively for R&D purposes. The greenhouse in question is metered and the consumption of gas, water and electricity in this specific greenhouse is measured and registered separately. The eligible costs can be objectively determined using the actual consumption in this greenhouse and the unit price of gas (€/m°), water (€/m°) and electricity (€/kWh).

Qualified: steel usage in prototype
A machine manufacturer purchases steel and uses a portion of it in its RED work on a prototype without user value. The fixed unit price per kilo of steel can be determined from an invoice. By measuring the weight, the machine manufacturer can ascertain how many kilos of steel were used in the prototype.

The eligible costs can be determined by multiplying the fixed unit price of the steel (€/kg) by the weight of steel used in the prototype.

Non-qualified: office building lease costs
The R&D employees of a company conduct development activities in a leased office building. Non-R&D employees also work in this building. Approximately half of the total number of hours worked by all employees is spent on R&D. In this case, applying 50% of the lease costs of the entire office building would not be allowed, since the office building does not exclusively serve the purpose of R&D.

Non-qualified: floor stock for laboratory
A chemical company has a laboratory whose activities include R&D. Materials needed by the lab, such as pipettes and test tubes, are taken from the company's general warehouse. The use of the materials for R&D is calculated based on the number of R&D hours relative to the total number of hours worked in the laboratory.

This cannot be considered an objective calculation. The costs for the materials used may not be determined in this manner and are therefore not eligible.

  • 1
    An expenditure comes into consideration for the WBSO in the year that the operating asset is put into use. The portion of the eligible expenditure is determined from the date on which the operating asset has been commissioned until the end of the calendar year.
  • 2
    A given expenditure under the threshold of € 1 000 000 can be included in only one R&D Statement per calendar year.
Rule: if the portion of the expenditure that is atributable to and used for your R&D is less than € 1 000 000, you may include this amount only once in your WBSO application. Example: you spend € 1 200 000 on purchasing a new machine, which is used for 60% for R&D activities and for 40% for production in the year of commission. The portion that is atributable to and used for R&D is 60% of € 1 200 000 = € 720 000. As this portion of the expenditure is less than € 1 000 000, it may be included only once in your WBSO application.
  • 1
    When the expenditure on an individual item of operating asset amounts to € 1 000 000 or more in a calendar year, then a maximum of 20% of the purchase price comes into consideration for the WBSO. You may then claim a maximum of 20% of this purchase price in the WBSO application for a total of 5 calendar years, provided that the operating asset is used for the purposes of R&D in those years.
Example: you spend € 3 000 000 on purchasing a new machine, which is used in equal measure for R&D (50%) and regular production (50%) in the year of commission. The portion that is atributable to and used for R&D is 50% of € 3 000 000 = € 1 500 000. This expenditure must be spread over a maximum of fve calendar years. It follows that in the frst year, 50% of 20% of € 3 000 000 = € 300 000 is eligible.
  • 1
    You use the same “First apply - then use” and the “First use & pay - then state” approaches for the expenses as you use for the costs (see the “Costs” section above).
Further examples of qualified and non-qualifed costs and expenses (expenditures).
  • WBSO development project
    A manufacturer of central heating boilers is developing a new type of central heating boiler.
    This central heating boiler will ultimately be manufactured in mass production. A prototype being constructed during the development process will be used to test the operating principle. Once the operating principle has been demonstrated, the prototype will be scrapped.
    The hours spent on the construction of this prototype are regarded as R&D hours.

    Qualified WBSO support costs & expenditures:
    • costs incurred in the purchase of parts for the construction of the prototype:
    • costs incurred in the purchase of new measuring instruments required to carry out the tests.

    Non-qualified WBSO support costs & expenditures:
    • costs incurred in hiring employment agency staff for the performance of the tests (this involves hiring in labour):
    • depreciation on existing test equipment (depreciation is not a paid cost):
    • costs incurred in acquiring a patent (not RED).
  • WBSO technical scientific research
    An entrepreneur wishes to increase his knowledge of catalysts in order to prolong their service life. His research is focused on reaction kinetics. The entrepreneur seeks explanations for both the fouling and degeneration of the catalyst. Laboratory experiments are carried out to test the theoretical backgrounds.

    Qualified WBSO support costs & expenditures:
    • expenditures incurred in the purchase of laboratory equipment used for the research;
    • costs incurred in the purchase of the raw materials used in the laboratory experiments;
    • costs incurred in arranging for third parties to carry out the laboratory tests;
    • costs incurred in the purchase of software specifically required for simulations and/or analyses.

    Non-qualified WBSO support costs & expenditures:
    • visits to trade fairs (not directly attributable to RED):
    • use of a company laboratory (this does not involve paid costs):
    • the costs incurred in hiring in employment agency staff to perform tests in the company laboratory (this involves hiring in labour).
    More examples of costs and expenditures are available on the WBSO website, www.rvo.nl/wbso
  • Not regarded as R&D hours:
    • attendance at fairs and conferences;
    • attendance at training programmes, courses and symposia;
    • administration of R&D or other administrative and organisational activities;
    • supervision of trainees and graduation-project students;
    • building and technical installation designs;
    • making a product production-ready;
    • projects not applied for and/or not approved;
    • activities not directly and exclusively linked to the R&D project;
    • activities performed outside the European Union.
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