WBSO and the innovation box: Dutch tax incentives for founders

The Netherlands offers some of the most generous tax incentives in Europe for companies doing R&D, and they are equally open to foreign-owned companies. A Turkish-owned BV that develops software, designs products or improves a production process can use the WBSO for its Dutch staff and the innovation box for the profit from the technology it developed. This article explains how the two incentives work, who qualifies and how to apply.

Rates and limits are updated every year with the budget; the amounts below reflect the position at the date of writing, and we check the RVO’s current table together before applying.

What is the WBSO?

The WBSO (Wet Bevordering Speur- en Ontwikkelingswerk) is a scheme that gives a reduction in payroll tax (loonheffing) on the wages of R&D staff. It is not a cash grant: the BV deducts part of the wage cost attributable to R&D hours from the payroll tax it would pay to the Belastingdienst. In practice this noticeably lowers the cost of R&D staff.

Key features:

• Rate: 36% on the first bracket of the R&D wage and cost base, 50% for starters; 16% on the part above the bracket. The 2026 budget raised the first bracket limit considerably; the current limit is published on the RVO’s page.
• The DGA counts: if you do R&D as a salaried director in your own BV, your own hours count too.
• For an eenmanszaak there is a separate fixed deduction, but the real strength of the incentive shows in a BV with payroll.
• Costs and investments: in addition to staff costs, materials and investments belonging to the R&D project are added to the base, either at actual cost or at a fixed amount per hour.

Which work counts as R&D?

The RVO accepts two types of project:

1. Technical-scientific research, and
2. Development of a product, process or software with technical novelty.

The decisive criterion is that there is a technical uncertainty to be solved: “We do not know how this is done and we have to solve it ourselves.” Configuring existing software, implementing a solution bought on the market, market research, design and commercial development do not count as R&D. For example, an e-commerce BV developing its own stock forecasting algorithm from scratch falls under the WBSO; implementing an off-the-shelf ERP does not.

How do you apply?

• The application is made to the RVO before the R&D period starts; retroactive applications are not accepted. You can apply several times a year, each for a period of at least three months.
• The application describes the projects: the technical problem, the solution approach, the planned hours and people.
• For the projects it accepts, the RVO issues an S&O-verklaring (R&D declaration); the BV applies the reduction in payroll on the basis of this declaration.
• The BV must keep hour records (urenadministratie): who, for which project, how many hours on which day. The RVO can audit; without records the incentive is clawed back.
• At the end of the period the actual hours are reported to the RVO.

To apply, the BV needs Dutch payroll and eHerkenning (the digital business identity). A BV with no staff in the Netherlands yet can start with the DGA salary.

What is the innovation box?

The innovation box (innovatiebox) taxes the profit from intangible assets you developed yourself (software, patented technology, plant breeders’ rights) at an effective 9% corporate income tax rate, against the normal rates of 19% and 25.8%. We explained the corporate tax calculation in Dutch corporate income tax 2026.

For most companies the entry ticket is the WBSO: to access the innovation box, the asset must have been developed under the WBSO. Larger companies additionally need a patent or similar right. So the two incentives are linked: first the WBSO, then the innovation box for the profit that arises from that work.

Practical points:

• You have to determine how much of the profit comes from the innovation; for small companies there is a simple fixed-rate method under which a percentage of profit (up to a cap) counts as innovation box profit without detailed analysis.
• For larger profits, an advance agreement (ruling) with the Belastingdienst is the safe route.
• If development costs were deducted earlier, the incentive applies only after profit equal to those costs has been recaptured.

Example

Suppose two developers and the DGA in a software BV spend a total of 3,000 hours on R&D, and the wage cost attributable to those hours is € 150,000. With starter status, the WBSO provides a payroll tax reduction of up to 50% of this base, so up to € 75,000 (limited by the bracket and the actual payroll tax due). If the same BV earns € 300,000 a year from this software two years later, the part that falls under the innovation box is taxed at 9% instead of 19–25.8%; the difference runs into tens of thousands of euros.

The figures are illustrative; the actual amount depends on the salary structure, the bracket limit and how much of the profit comes from the innovation.

Conditions for Turkish-owned BVs

• The incentives are tied to the BV’s Dutch payroll and its profit taxed in the Netherlands; hours of a team working in Türkiye do not count for the WBSO.
• The development must be carried out in the name and at the risk of the Dutch BV; different rules apply to development services bought from the Turkish parent.
• Which company owns the intellectual property should be planned from the start, both for the innovation box and for profit repatriation.

Other incentives

Beyond the WBSO and the innovation box there are investment deductions (KIA, EIA, MIA) and the RVO’s grant programmes; we summarised them on the grants and funding page. We screen which programme fits you based on your project.

Conclusion

The WBSO lowers the cost of R&D staff in the Netherlands; the innovation box cuts the tax on the resulting profit to 9%. Together they make the Netherlands one of the most favourable places in Europe for a BV that develops technology. The conditions are clear: apply in advance, technical uncertainty, hour records and Dutch payroll. Under our grants and funding service we assess your project’s eligibility, prepare the RVO application and set up the hour-recording routine; we are glad to hear about your project in a free intro call.