NETHERLANDS LAW AND PRACTICE Contributed by: Friederike Henke, Ingrid Cools, Philip ter Burg, IJsbrand Uljée, Suzan van de Kam and Epke Spijkerman, BUREN
Furthermore, entrepreneurs must meet certain administrative obligations when rendering VAT taxable or exempt transactions (eg, invoicing, keeping proper accounts, filing VAT returns, and EU Sales Listing reporting). 5.3 Available Tax Credits/Incentives Innovation Box Regime Dutch taxpayers can apply an “innovation box regime” to qualifying profits from certain self- developed intangible fixed assets. Under the innovation box regime, profits are included in the tax base of a taxpayer only for 9/25.8 part, resulting in an effective tax rate of 9%. Qualifying profits are benefits from qualifying self-developed intangible fixed assets multi - plied by a nexus ratio. The nexus ratio consists of 130% of the taxpayers’ operating expenses and third-party outsourcing expenses incurred in relation to the creation of the relevant asset, divided by any expenses incurred in relation to the creation of the relevant assets, with a maxi - mum of 100%. For small taxpayers, qualifying assets are intan - gible fixed assets developed by research and development (R&D) activities for which a so- called R&D certificate was issued. Taxpayers are considered small if their net group turnover is less than EUR250 million in the respective financial year and the four preceding years combined, and the benefits derived from the intangible assets are less than EUR37.5 mil - lion in the respective financial year and the four preceding financial years combined. For large taxpayers, qualifying assets are intan - gible fixed assets developed by R&D activities
falling within the scope of certain specific cat - egories. R&D Wage Tax Credit Regime The R&D wage tax credit regime enables com - panies that engage in R&D activities to pay less wage tax and social security contributions than they withhold 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 Netherlands Enterprise Agency (RVO). The granting of this permit is subject to the fol - lowing 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 difficul - ties 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 acquisition of one or more new qualify - ing business assets.
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