100 million in additional support for R&D in the Netherlands

During the discussion of the new Dutch Tax Plan, an amendment by CDA, CU, VVD, BBB, and Volt was adopted to structurally increase the budget for the Promoting Research and Development Act (WBSO) by €100 million. This increase is essential for stimulating innovation in the Netherlands, especially within SMEs and startups/scale-ups, which often rely heavily on this scheme. “This makes the WBSO an even more powerful support for innovative companies looking to grow, making it easier for them to invest in research and development,” FME wrote in a statement.

The €100 million will be used to adjust the parameters. The rate of the first tranche of the WBSO goes from 32% to 36% benefit on R&D costs. In addition, the first tranche will be widened from €350,000 to €380,000. Finally, the rate for starters in the first tranche goes from 40% to 50% benefit on R&D costs. This strengthens innovative SMEs' ability to expand their R&D activities.

Successful instrument

“FME warmly welcomes this structural increase. The WBSO is a proven successful instrument that is indispensable when there is a strong need for innovation and productivity growth, as Draghi also writes in his report. SMEs account for 97% of WBSO applications and are thus encouraged to expand and scale up their innovative activities, contributing to the competitiveness of their business and strengthening innovative ecosystems.”

Accessible

The State of SMEs, released this week, pointed out that SME productivity growth lags behind other affluent countries. Moreover, SMEs' expected R&D spending for next year lags behind that of large companies (6% and 12% in manufacturing, respectively. 6.4% and 17.5%). “To strengthen the backbone of the Dutch technology industry, it is therefore necessary to incentivize SMEs to invest more in productivity growth and innovation. This broadening of the WBSO contributes to this in a simple and low-threshold way.”

Stability

Furthermore, according to FME, it is positive that the scheme does not undergo major changes but offers stability for the entire technological industry. “Besides the continuation of this crucial scheme, the focus should be on making the WBSO more accessible and reducing administrative burdens to serve SMEs better, particularly with the WBSO.” FME is involved in the evaluation of the WBSO and looks forward to the results, which are expected to be published soon.

The Senate will vote on the Tax Plan in early December, and if it is passed, the increase described here will be final.