Innovative startups will continue to receive government support in 2017 to enable them to grow to scale-ups and beyond. On Tuesday September 20th the government has traditionally presented its rules and regulations for the coming year on Prinsjesdag, the country’s annual Budget Day. Here we explain what the most important news of the day means for your Startup.
WBSO 2017 unchanged
Last year the Dutch government merged the WBSO, the tax credit to incentivize entrepreneurs to invest in research, with the Research and Development Tax deduction called RDA. This merger seems to work well. After some years of changes in the rates and structure of the WBSO, the scheme remains unchanged this year. This means that in 2017 the WBSO discount is 32% up to a total wage of € 350,000, and the tax subsidy above €350,000 will remain 16%. For starters in 2017 the discount of 40% on the payroll wages applies.
Bottom of the ‘usual wage regulation’ lowered to € 20,000
If your Startup’s legal form is a BV, the arrangement of the ‘usual wage regulation’ (gebruikelijkloon regeling) applies. This means that you are required to pay a salary from your BV or personal holding company to yourself. This is taxed just like other ‘wage earners’ in Box 1 as income tax. The height of the usual wage was legally set at a minimum of € 44,000 per year. Because this was often not feasible in the early stages of a startup, you could make an agreement with the tax authorities to reduce this. This is a fairly uncertain and time-consuming process. What is new, is that this has been made easier since 2017. The minimum usual wage is set at the minimum wage (which is about € 20,000) if the conditions are met that the startup uses WBSO and is considered as a starter for the WBSO regulations.
The news about the innovationbox is now official. The innovationbox gives a discount on corporate income tax. A condition to be eligible to benefit from this discount is that that you developed your profitable innovation within the WBSO regulations, or that you have developed a patent. From 2017 the benefit may be limited by a specific formula that prevents developments outside the Netherlands to qualify for the innovation.
Co-investing with Angels
Last but not least is the potentially very interesting announcement that the government can act as a co-investor with an angel / private investors in a startup. An amount of € 23 million for this budget is available. To be continued!