NETHERLANDS Law and Practice Contributed by: Friederike Henke, Ingrid Cools, Philip ter Burg, IJsbrand Uljée, Suzan van de Kam and Epke Spijkerman, BUREN
from their employees. The amount of the reduction is limited to the total amount of wage costs and social security contributions. R&D costs may include both wages and other costs related to self-developed R&D. In order to qualify for the R&D wage tax credit regime, companies have to apply for a permit from the Neth - erlands Enterprise Agency (RVO). The granting of this permit is subject to the following conditions: • the R&D activities (eg, development of a product, production process, software or technical research) will be performed in-house by the applicant; • the innovation is new to the organisation of the applicant; • the applicant seeks to solve technical difficulties of the development process; • the R&D activities are performed within the EU; and • the R&D permit is requested in advance. In addition, the granting of the permit is subject to the available funding. Business Incentives The small-scale investment incentive provides for tax deductions for corporate income tax and personal income tax purposes in connection with the acquisi - tion of one or more new qualifying business assets. The investment incentive for environment improv - ing assets provides for tax deductions in connection with the acquisition of one or more new environment- improving assets. The deduction generally amounts to 40.0% of the amount of the investment, which should be included on a list published by the RVO, and requires the issuance of a notification from the RVO. Under conditions similar to those of the investment incentive for environment-improving assets, it is pos - sible to apply the random depreciation regime to environment-improving assets or energy-improving assets. Under this regime, taxpayers can randomly depreciate 75% of the investment made in the quali - fying asset.
Some investments are excluded from the application of the above-mentioned incentives. 5.4 Tax Consolidation Fiscal Unity for Dutch Corporate Income Tax Purposes Companies that are part of a “fiscal unity” for Dutch corporate income tax purposes may file a consolidat - ed tax return, and are taxed on a consolidated basis as if they were just one company. As a result, transac - tions between companies belonging to the fiscal unity are, in principle, ignored and not subject to taxation on profits or gains. However, for purposes of certain anti-abuse rules (eg, for the anti-base erosion rules included in article 10a of the Dutch Corporate Income Tax Act 1969), transactions between entities within a fiscal unity are considered. The Dutch fiscal unity rules include other anti-abuse rules, which can be triggered by the formation or dis - solution of a fiscal unity, for example. Companies belonging to the fiscal unity are jointly and severally liable for payments of corporate income tax over the period of the fiscal unity. Parent companies and their subsidiaries can, upon request, form fiscal unities if a number of requirements are met, including the fol - lowing. • Ownership requirement – the parent company must hold the economic and legal ownership of at least 95% of the shares in the nominal paid-up capital of its subsidiary, which provides entitlement to at least 95% of the statutory voting rights in that subsidiary and to at least 95% of the profits, and represents at least 95% of the capital of the subsidiary. • Residency requirement – the applying companies should be residents of the Netherlands for tax treaty purposes. In addition to the above, a parent company can form a fiscal unity with an indirectly held subsidiary if both companies are tax residents of the Netherlands and the intermediate company (or companies) between the parent company and the indirectly held subsidiary resides in another EU or EEA member state. Further -
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