Does your business develop innovative products, processes or software? And were you awarded a WBSO statement (WBSO-verklaring) during the research and development phase? Then you may also be eligible for the innovation box. And that means a corporate income tax credit.

The innovation box gives you a corporate income tax credit in respect of the profits from your innovation. If you satisfy the conditions, the proceeds from your innovation will not be taxed at 25%, but at no more than 7% - a benefit you do not want to miss out on.

The innovation box: credit with retroactive effect

The innovation box lowers the corporate income tax payable on profits from innovations. You can benefit from this tax scheme for the years during which you satisfy the conditions. This means that - in contrast to the WBSO - you can also apply the innovation box retroactively to all years for which corporate income tax assessments are not yet final. However, a lower amount in corporate income tax as a result of the innovation box does not mean that all of your profits will be taxable at that lower rate.

WBSO and access to innovation box

The first key to the innovation box is the WBSO (Dutch Promotion of Research and Development Act). With it, you demonstrate that you have developed the innovation yourself. Your business’s sales volume determines whether you will need an extra entry ticket to the innovation box. You do if your global sales for the past five years exceeded 250 million euros or if the proceeds from innovation amounted to over 37.5 million euros over the past five years.

You will have access to the innovation box if you have developed or been awarded:

a patent or plant breeder’s right (or applications for such);
software;
a licence for marketing a drug;
a protection certificate issued by the Netherlands Patent Office (Octrooicentrum Nederland);
a registered utility model to protect your innovation (not being a design); and
an exclusive licence to use a legal ticket in a specific manner or territory or for a specific period.

Promoting innovation

The innovation box is not an end in itself. You should use this scheme for the purpose for which it is intended - to promote innovation. When receiving a WBSO statement and Innovation box ruling, you must satisfy certain accounting requirements. We can assist you with these. If you satisfy the accpunting requirements, you will automatically take your business to a new level of maturity. And that will yield much more than just tax benefits.

If you have already scheduled an appointment to discuss the innovation box, we recommend that you have your current innovation box contracts reviewed for their tenability.

Looking beyond tax aspects

Do you need help finding out whether you are eligible for the innovation box or making the most of this tax facility? BDO will be happy to tell you about your options and can help you coordinate matters with the tax authorities and the subsequent implementation. BDO’s innovation specialists are in close contact with the tax authorities and look beyond the tax aspects. Their long-standing experience with innovation box procedures, yield improvement, transfer pricing and the implementation of new business models make BDO highly successful in this specialist area.

More information

Please do not hesitate to contact one of our specialists for an appointment without any obligation if you interested in finding out whether your organisation is eligible for the innovation box.