Subsidies in the Netherlands

Most people think of a subsidy as money provided by the government for a specific purpose. The Dutch government subsidises an activity based on its benefits to the public interest. If the government considers the activities in question valuable to society, they grant it and pay part of the cost which has been made by the subsidy recipient.

Governments, therefore, have an interest in promoting and providing subsidies but these count only for a specific part of the company’s new activities.

Entrepreneurs in the Netherlands should cover a substantial part of the total finances, and keep in mind that there is a difference between total costs and the eligible costs. Finally, piling up several subsidies for a single activity is generally not possible (anti accumulation regulations).

Note that, apart from the government, there are also private institutions that provide funds to stimulate certain activities and these contributions are considered subsidies too.

Types of subsidies in the Netherlands

There are many governmental sections on different (hierarchy) levels and each of these sections has specific goals to achieve within a certain period of time. Note that there are more than 1.300 subsidies granted on European, national, provincial and local basis.

There are various synonyms used for the word "subsidy" such as financial incentives or facilities, guarantee facility, investment facility, funds, fiscal arrangements and tax reductions.

› Investment subsidies

These accelerate the acquisition of the required investment capital.

› Cost subsidies

Most commonly contribute to the total cost of a project by covering specific expenses.

› Tax subsidies (Tax reductions)

Strictly speaking, these are not subsidies; instead of money being paid, a certain amount of the total of taxes is deducted, usually for sustainable energy, socially responsible, and environmentally friendly projects.

› Favourable loans

These are loans provided at a favourable interest rate and pay-back period. Apparently, they have to be paid back at some point but it saves money in the long run.

The Netherlands’ new subsidy policy (2012)

Currently, the subsidy policy in the Netherlands is of an offensive nature. From 2012 the new governmental representatives aim to create nine Dutch sectors (chemistry, creative industry, energy, high-tech systems and materials, life sciences and health, agriculture & food, logistics, market gardening, water, and multinational headquarters) so that available subsidy resources can be deployed on specific activities.

Furthermore, the government is cutting back on the number of subsidies and will reward (extra tax reductions) increased profits and investments in Research & Development.

Consequently, entrepreneurs should assertively and actively anticipate offers by the government in order to benefit.

Does my project qualify?

It could be worthwhile to explore subsidy possibilities, if your project or company is or planing to start:
› realising and / or investing in energy saving
› investing in contributions (durable environment)
› exporting to or investing in developing countries
› developing information and communication technology
› working on socio-economic development (rural regions)
› developing new products, processes and services
› developing (new) technologies
› cooperating with other European companies or universities

Applicability & Relevance

When you consider applying for certain subsidy regulations, think about the following:
› Do your company activities fit within the aim and functioning area of the subsidy regulation?
› Are the conditions understandable?
› Do you know exactly what "advanced," "innovative" and other vague terms mean?
› Are you able and willing to meet the conditions of the subsidy?
› What is the validation period?
› Which subsidy and what amount does my company qualify for?

Some examples

› 50% wage tax reduction for personnel dealing with research and development of new products, processes and software
› 5% (instead of 20%) company tax over the profit from (subsidised) products
› 11.000 - 17.000 euros extra (entrepreneurial) deduction on generated profit (research & development)
› 42% extra investment deduction over the invested amount (energy saving equipment)