Foreign tax credit
See Foreign income in the Income determination section for a description of the foreign tax credit regime.
There is a system of deductions for small investments, the so-called small scale investment deduction. To calculate this annual deduction, investments of more than EUR 450 each are totaled to determine the percentage of the deduction. The brackets are as follows as of 1 January 2019:
|Total of investments (EUR)
|0 to 2,300
|2,301 to 57,321
||28% of the value of the total of small investments
|57,321 to 106,150
|106,150 to 318,449
||EUR 16,051 minus 7.56% of the amount exceeding EUR 106,150
Investments in energy-efficient assets
For investments in new energy-efficient business assets that meet the Energy List requirements, an additional deduction (EIA) from CIT is available. The minimum investment amount per asset is EUR 2,500. The allowance equals a percentage of the annual amount, with a maximum of EUR 122 million (2019), of eligible energy investments. The right to the EIA is declared with the tax return, provided the investment is reported previously in time to the Netherlands Enterprise Agency (www.rvo.nl). An investment can be reported in phases, but the minimum amount for notification is EUR 2,500. In 2019, the allowance amounts to 45%.
Investments in environmental assets
For investments in certain new environmental improving assets that meet the Environment List requirements, an additional deduction (MIA) from corporate income is available. The minimum investment amount per asset is EUR 2,500. In 2019, the allowance equals 36%, 27%, or 13.5% (depending on the ministerial classification of the assets) of the annual amount, with a maximum of EUR 25 million, of eligible environmental investments. The right to the MIA is declared with the tax return, provided the investment is reported previously in good time to the Netherlands Enterprise Agency. An investment can be reported in phases, but the minimum amount for notification is EUR 2,500.
Conducting certain R&D activities on applied new technology is subsidised by a reduction of wage tax to be paid on wages of employees engaged in R&D of technologically new products. The subsidy accrues to the employer when the employee is credited for the normal amount of wage tax. The subsidy is based on specific legislation (WBSO).
To obtain the relief under the R&D incentive programme, taxpayers must file an electronic/online application with the Netherlands Enterprise Agency. The taxpayer will receive an R&D declaration. The budget for this subsidy is fixed, so the amount of the subsidy is dependent on budget availability. Note that self-developed and utilised software falls within the scope of the R&D incentive under certain conditions.
The WBSO application for R&D includes not only salary costs but also other costs and expenses related to R&D. The benefit of the fiscal scheme is awarded in the form of a wage tax reduction. In 2019, the benefit amounts to 33% of the first EUR 375,000 of R&D costs and 15% of the excess (both salary and other costs and expenses). For start-ups, this amounts to 41%. Note that the maximum benefit cannot exceed the total amount of wage tax due. Instead of applying for the real costs and expenses (non-salary costs), the taxpayer may choose to take into account a fixed amount based on R&D hours. The fixed amount is EUR 10 per hour as long as the total R&D hours do not exceed 1,800 and EUR 4 for every hour above. Withholding agents are obligated to report the number of hours, costs, and expenses jointly for all R&D statements granted in a calendar year.