The WBSO subsidy lowers the labor cost of technical innovations. For 1 FTE, this can result in an annual saving of around €28.000. There is no set limit, the benefits of this subsidy can go over €100,000. The benefits can thus structurally contribute to the development capacity of an innovative company.
Do you want to find out if you are eligible for the WBSO subsidy? Do the subsidy check and discover within 1 minute whether you meet the requirements. The scan is completely free of charge.
The WBSO for every innovative business
WBSO is an abbreviation for Wet Bevordering Speur- en Ontwikkelingswerk, which translates to “Promotion of Research and Development Work Act. In short, the WBSO is a tax scheme for renewal and the stimulation of technical innovation.
A number of WBSO subsidy conditions? Every entrepreneur or company in the Netherlands that wants to develop or investigate something is in principle eligible for the WBSO. This also applies to (paid) customer projects. For example, think of:
- Development of (parts of) software.
- Development of (parts of) a physical product or production process.
The developments must of course be technically new to the applicant company.
“Excellent experience with Ugoo! They have impressive technical knowledge and understand what we are working on.”
WBSO subsidy 2019
Just as in 2018, the benefit for BV’s and other payroll taxpayers according to the WBSO 2019 is 32% of the first €3500.000 in gross R&D costs (including wages), and 16% of the excess. For so-called techno-starters (companies that were founded <5 years ago) the first bracket is 40% instead of 32%.
Are you a sole trader or a VOF? A self-employed person with a WBSO subsidy can deduct €12.775 from the income taxes each calendar year. For starters, the deductible benefit is limited at €19.146. A condition that has to be met is that a self-employed person spends at least 500 hours a year on R&D.
Calculation of benefit
The calculation of the financial benefit of a WBSO subsidy:
- 32% (40% for starters) of the first €350.000 wage costs involved in research and development work (also called R&D)
- 16% of the remaining wage costs
With an average hourly wage of €29, this results in a subsidy benefit of around €22.000 per full-time employee per year (€28.000 for starters). Holdings can also benefit from this. Self-employed persons who spend at least 500 hours a year on R&D receive a fixed deduction from the income tax of €12.775 (€19.146 for starters).
In addition to developing or researching technologies or other processes, there are some additional WBSO conditions:
- It concerns product, process, program or technical-scientific research;
- The activities are technically new to the applicant;
- Activities are carried out by R&D staff that is on the Dutch payroll;
- Only future R&D activities are eligible;
- Any development bottlenecks are resolved within the company;
- The company is subject to income tax;
- The company is subject to income tax and spends a minimum of 500 hours per year on development and research (for example, a sole trader) and / or;
- The company is subject to corporation tax and pays wage tax for employees who carry out the development or research (for example, BV or NV or self-employed with staff)
What did the former RDA subsidy entail?
Since 1 January 2016, the tax benefits for R&D (withholding tax relief) and the Research & Development Allowance (RDA) have been merged into the WBSO subsidy. The RDA was intended for companies that carried out research and development work with the help of a WBSO subsidy. Whereas the WBSO subsidy reduced the labor costs for R&D, the RDA focused on the other costs and investments of WBSO projects. The RDA offered a tax benefit for this, in the form of a deductible item for income tax or corporation tax returns. The benefits could therefore only be deducted from (future) profits from the company.
RDA could be requested for:
- Expenditure for newly manufactured assets that were necessary for WBSO projects.
- Costs (other than wages) for the realization of own WBSO projects.
Why has it been abolished?
The RDA subsidy has been adjusted since it had disadvantages in the income tax, which were at the expense of the effectiveness of the subsidy. Some side effects have been overcome by redesigning the RDA:
- The net RDA benefit was related to the amount of profits that were made. As a result, the exact tax benefit of the RDA for entrepreneurs was uncertain at the time of investing.
- In addition, the RDA benefit was settled in later years, so that the liquidity benefit was only visible later. As a result, RDA had no influence on profit before tax, in contrast to the WBSO, which does have influence on profit before tax.
The Cabinet came to the conclusion that it was possible to merge the WBSO subsidy and RDA into one subsidy, whereby the financial benefit is set off against payroll tax. Since January 2016, organisations can apply for tax benefits for R&D costs through the WBSO. The same discount rates apply to wage costs and other R&D costs and expenditures. Entrepreneurs can now settle the total benefit through the payroll tax, instead of a much later settlement through the income tax.
Most important changes
- Choice: flat rate or actual costs and expenses. A choice must be made at the beginning of the year when applying for the WBSO for costs and expenses between a lump sum or the actual amount of costs and expenses. The choice made at the beginning of the year cannot be changed during the year.
- Changes in type of WBSO projects. It’s no longer possible to request a WBSO subsidy for the analysis of technical feasibility, or technical research. Since 2016, WBSO can only be requested for two types of projects: technical-scientific research and the development of technically new physical products, physical production processes or software.
- The concept of software has been adapted to clearly indicate that the WBSO subsidy is intended for the development of technically new software in a formal programming language, and not for the design of new systems.
Do you want to apply for WBSO subsidy? Do the free subsidy check from Ugoo or contact us for more information about applying for WBSO.