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At the request of the Ministry of Finance, Dialogic, in collaboration with UNU-MERIT, conducted an ex-post evaluation of the effectiveness and efficiency of the innovation box from 2010-2012. The innovation box is a fiscal instrument aimed at stimulating the business climate and innovation. Through the innovation box, profits generated by innovation are taxed at a rate of 5% instead of the standard rate of 25%.
The evaluation concludes that, overall, the innovation box is both effective and efficient. The Innovation Box likely leads to increased R&D and innovation, and contributes to the business climate in the Netherlands. Additionally, the administrative costs of the scheme are relatively low. While most users come from SMEs, the majority of the benefits are enjoyed by large companies.
However, some important points are highlighted. Firstly, it is mentioned that the innovation box is probably not the most powerful tool to stimulate R&D and innovation. There is no guarantee that the reduction in corporation tax will be used for (more) R&D and innovation. It is also noted that an increasing number of European countries have a similar instrument, decreasing the effectiveness of the Innovation Box in enhancing the Dutch business climate and leading to tax erosion.