Innovation box in the Netherlands | KPMG | GLOBAL

Netherlands: Innovation box approved by EU; applies to plant-protection products

Innovation box in the Netherlands

The Ministry of Finance on 28 June 2017 announced that European Code of Conduct group had approved the Dutch innovation box regime. The approval relates to the version of the innovation box that (for the most part) was introduced as of 1 January 2017 and was included in the 2017 Tax Plan.

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Accordingly, the European Union will not contest this new innovation box legislation on the grounds that the Netherlands was applying harmful tax competition. The European Code of Conduct group’s decision does not cover “state aid” aspects of the Dutch legislation on the innovation box or its implementation.

The approval of the innovation box also means that as of 1 January 2017, biological plant-protection products would fall under the innovation box regime. Consequently, a coverage measure would also take effect, whereby the percentage of the energy investment allowance (EIA) in section 3.42 of the Dutch income (personal) income tax law would be reduced by 2.5 percentage points to 55%.

 

Read a June 2017 report prepared by the KPMG member firm in the Netherlands

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