Innovation Box 2023
The innovation box is a special rate box within corporate income tax. With this box you can reduce corporate tax for profits from innovative activities. These profits are then only taxed at a maximum tax rate of 9%.
The innovation box is a special rate box within corporate income tax. With this box you can reduce corporate tax for profits from innovative activities. These profits are then only taxed at a maximum tax rate of 9%.
Innovation box rate 2023
The reduced tax rate of 9% instead of 25% increases companies’ return on R&D investments. Due to the reduced R&D costs, companies can invest more and this speeds up the R&D process. This increases the value of the organization. It provides a tax benefit of 64%.
Request an innovation box
Any company that can demonstrate that it invests sufficiently in innovation can apply for the innovation box and qualify for a tax reduction. This may involve Research & Development (R&D) or improvement of existing products or processes. It is important that the financial benefit that it provides is carefully considered before you apply the box.
Innovation box calculation
Innovation box conditions
Do you want to apply for this arrangement? There are a number of conditions that you must meet:
- A WBSO decision;
- Depending on the size of turnover or industry, a patent is or is not mandatory (a patent is not mandatory for an ICT company (but it is possible to apply for a patent for ICT!);
- A settlement agreement, drawn up in collaboration with the tax authorities.
Innovation box and the WBSO
As described above, a WBSO decision is a requirement when applying. In addition, a distinction is made between ‘small’ and ‘large’ taxpayers.
- Small taxpayer: For ‘small’ taxpayers (less than €50 million in net group turnover per year and a net turnover from innovative assets of less than €7.5 million per year), only a WBSO decision provides access;
- Large taxpayer: for a ‘large’ taxpayer, a patent (or a comparable right) is required in addition to a WBSO decision.
Innovation box flat rate
In order to allow SMEs to benefit more from the innovation box, the innovation box flat rate has been introduced. The lump sum has been created for companies where the benefits do not outweigh the administrative burden of determining the attributable benefits. This measure makes it possible to declare a maximum of 25% of the profit as a lump sum. It is then not necessary to determine to what extent the innovation has contributed to the profit. The maximum eligible profit is €100,000. This means that a maximum of € 25,000 is taxed at 9% instead of the usual 19% or 25.8%. The flat-rate scheme may be used for a maximum of 3 years for the same innovation.
Innovation box example
Your company’s fiscal year 2023 runs parallel to the calendar year 2023.
The qualifying benefits total €2,000,000.
The amount on which you calculate the corporation tax =
(9 / 25.8) x 2,000,000 = €697,674
Up to and including € 200,000, the corporate tax rate is: 19%.
From € 200,000 the corporate tax rate is: 25.8%.
In this example, the corporation tax you have to pay is €166,399
Innovation box and the tax authorities
The innovation box is implemented by the tax authorities. When assessing the applications, the influence of WBSO innovations on the profitability of the company is examined. It is a complex arrangement. De Breed & Partners knows all the ins and outs of this scheme and advises and supports you during the application process.