Netherlands

Foreign tax credit

See Foreign income in the Income determination section for a description of the foreign tax credit regime.

Small investments

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 totalled to determine the percentage of the deduction. The brackets are as follows as of 1 January 2024:

The application of the small-scale investment deduction works as follows for investments of a taxpayer who is a participant of a partnership. First, the investments for the partnership of all the participants and the non-company investments made by the taxpayer concerned shall be added together (‘total relevant investments’). Consequently, the small-scale investment deduction for the relevant taxpayer shall be the amount of deduction that could be derived from the table above, multiplied by the investment amount made by the taxpayer, and divided by the 'total relevant investments'.

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 148,911,976 (2024), 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 2024, the allowance amounts to 40%.

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 2024, the allowance equals 45%, 36%, or 27% (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 (www.rvo.nl). An investment can be reported in phases, but the minimum amount for notification is EUR 2,500.

New technology

Wage costs

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 (www.rvo.nl). 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 2024, the benefit amounts to 32% of the first EUR 350,000 of R&D costs and 16% of the excess (both salary and other costs and expenses). For start-ups, this amounts to 40% of the first EUR 350,000 of R&D costs. 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 for the first 1,800 R&D hours and EUR 4 per hour for all R&D hours exceeding the first 1,800 R&D hours. Withholding agents are obligated to report the number of hours, costs, and expenses jointly for all R&D statements granted in a calendar year.