Innovation Box and R&D Remittance Reduction: Opportunities for Tech Entrepreneurs

Why tax innovation schemes matter for tech companiesInnovative entrepreneurs invest heavily in development, often incurring significant costs. Smart tax benefits can make a real difference.Whether you're building an AI platform, developing an app, or working on machine learning solutions, innovation takes time, money, and often a large team. Fortunately, the Dutch government offers various schemes that help lighten these burdens. Especially the WBSO, R&D remittance reduction and Innovation Box are very attractive for tech companies.
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The WBSO: wage cost subsidy for R&D

The WBSO is the key scheme for companies involved in research and development. It reduces your wage costs or provides a tax deduction. The WBSO (Research and Development Promotion Act) offers a tax benefit for companies engaged in R&D. This includes software development, technical scientific research or improving existing technologies.
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What do you get exactly?

The WBSO reduces wage costs for employees involved in R&D, via a reduction in wage tax. For self-employed entrepreneurs, a fixed deduction applies, regardless of exact hours or projects.

R&D remittance reduction: direct cost relief

The WBSO is effectively a form of R&D remittance reduction. But how does that work in practice in your payroll?Once you have a WBSO decision, you can deduct an amount from the wage tax return. This amount depends on the approved R&D hours and costs. You don’t have to wait for a tax refund: you simply pay less wage tax in the same period. For fast-growing tech companies, this is attractive as cash flow is often tight.
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The Innovation Box: taxing innovation profits at a lower rate

Besides reducing your costs, you can also benefit from paying less tax on the profits you make from innovation.The Innovation Box is a scheme within corporate income tax. If you have a BV and generate profits from self-developed technology for which you’ve received a WBSO decision, you may apply a lower tax rate of 9% instead of the standard 19–25.8%.

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When are you eligible for the Innovation Box?

Not every tech BV automatically qualifies for the Innovation Box. There are conditions.Key requirements:You must generate profit from an innovative product or service

- You must have a WBSO decision or patent
- The innovation must be developed in-house (not purchased technology)

For startups and scale-ups with software solutions, the WBSO often serves as the access point to the Innovation Box.

Example: how the Innovation Box works in practice

What does the Innovation Box actually save? Let’s look at a concrete example.
Suppose your BV makes €500,000 profit per year, of which €300,000 comes from your own developed platform for which you received a WBSO decision.

Without Innovation Box:
25.8% of €500,000 = €129,000 corporate tax

With Innovation Box:
25.8% on €200,000 = €51,600
9% on €300,000 = €27,000
Total: €78,600 → Saving: €50,400

A significant tax saving, as long as you can substantiate and allocate the profit correctly.

Smart combination: WBSO + Innovation Box = optimal benefit

Smart combination: WBSO + Innovation Box = optimal benefitThe real advantage lies in combining schemes. That requires a strategic approach.The WBSO reduces your upfront costs (development wages), while the Innovation Box helps lower the tax on post-launch profits. By aligning these schemes, you benefit both during and after development.Practical tip: during your WBSO application, already identify which innovations could later qualify for the Innovation Box. This helps avoid disputes with the tax authorities about allocation later on.

Administration and documentation: essential for success

Without proper time tracking and documentation, the tax advantage could slip through your fingers.For both the WBSO and the Innovation Box, you must demonstrate what was developed, how much time was spent, and by whom. Always maintain:
- Time tracking per employee and project
- Technical documentation of development processes
- Reports, code versions and prototypes

The better your records, the smoother your interaction with the tax office — and the greater your chance of success.

Conclusion: make full use of innovation tax benefits

As a tech entrepreneur, you're missing out if you don’t leverage the Innovation Box and WBSO.The Netherlands actively encourages innovation with tax incentives. By strategically using the WBSO, R&D remittance reduction, and Innovation Box, you reduce costs and pay less tax on your profits. However, this requires good planning, clear documentation, and the right timing.Not sure if your project qualifies or how to apply these effectively? Good advice pays off. Maximise your fiscal benefits — and keep your focus on building the future.