Does the WBSO really work for innovation?

Yes, the WBSO works, but less strongly than is often assumed. The WBSO is the Dutch tax credit for research and development work (S&O in Dutch: technical research and the development of new products, processes or software). According to the official evaluation of 2018 to 2022, businesses invest an average of 81 cents extra in R&D (research and development in the broad sense) for every euro of credit. International research confirms that such credits work, especially for businesses that find it hard to raise money.

In this article

1. What is the WBSO and what does it give you in 2026?
2. Do businesses really do more research and development because of the WBSO?
3. Does the WBSO work better for small or for large businesses?
4. Why does part of the WBSO benefit leak away?
5. Does more research also lead to more innovation?
6. Does the credit go to extra research or to higher wages?
7. Why does the WBSO work less strongly than before?
8. When does the WBSO give your business the most?

What is the WBSO and what does it give you in 2026?

The WBSO is a reduction of payroll tax (the wage tax and contributions you pay as an employer) for businesses that develop technically new work themselves. You get part of the wage costs of that work back through your payroll tax return. Businesses with staff can also include other costs, such as materials (RVO, 2026).

In 2026 the WBSO reduces your payroll tax by 36% on the first €391,020 of your S&O base (the amount of S&O wage costs and other S&O costs on which you receive the credit). On the part above that you get 16%. Starters get 50% in the first bracket. The first bracket limit has been raised once for 2026 (RVO, 2026).

A worked example. A business with an S&O base of €200,000 pays €72,000 less payroll tax in 2026, namely 36% of €200,000. If the business is a starter, that is €100,000. A business is a starter if it had staff for no more than four of the five preceding years and received an S&O declaration in fewer than three of those years. In short, a business gets the starter rate for three years at most (SEO & Dialogic, 2025).

If you work on S&O as a self-employed business owner without staff, the benefit runs through income tax. In 2026 you then get an R&D deduction of €15,979, plus €7,996 extra if you are a starter (Belastingdienst, 2026). One of the conditions is that you personally spend at least 500 hours a year on recognised research and development work (Belastingdienst).

You always apply for the WBSO in advance, for work that has yet to start. You cannot apply for the WBSO for work you have already done (RVO, 2026).

Do businesses really do more research and development because of the WBSO?

Yes, but less than the credit itself. The official evaluation of 2018 to 2022 finds that businesses spend an average of 41 cents extra on S&O for every euro of WBSO credit. In the broader sense of R&D, that is 81 cents extra (SEO & Dialogic, 2025). Researchers call this ratio the bang for the buck: how much extra investment one euro of tax credit produces.

A ratio below one does not mean the rest is money thrown away. The WBSO applies to all your S&O, including the part you would have done without the credit. On that part, the credit is a benefit without extra effort. The evaluation estimates that the WBSO generates just over half a billion euros a year in extra S&O. That is about 9% of the €5.9 billion that businesses with staff spend on S&O each year (SEO & Dialogic, 2025).

Older Dutch research reaches a similar picture. Lokshin and Mohnen studied Dutch businesses between 1996 and 2004. They found some evidence that the WBSO prompts extra R&D. Only for small firms could they rule out that the credit crowds out the firm's own spending. Because the credit covers all research and not just its growth, they argue that a lot of money goes to work that would have happened anyway (Lokshin & Mohnen, 2012).

The evaluation's overall verdict is that the WBSO is largely effective. The government agrees and wants to keep the scheme stable and predictable, without an end date (letter to parliament, 2025).

Does the WBSO work better for small or for large businesses?

At very small businesses, the WBSO triggers less extra investment. For micro firms, with 0 to 9 people employed, the evaluation finds a smaller effect. If you leave those micro firms out, the return rises to 56 cents of extra S&O and €1.08 of extra R&D per euro of credit (SEO & Dialogic, 2025).

That does not make the WBSO useless for small businesses. According to the researchers, the scheme mainly prompts micro firms to start S&O, and less to expand existing work. So the group of businesses doing research grows. About half of all WBSO users have 1 to 9 employees (SEO & Dialogic, 2025).

Foreign research points to strong effects at businesses with little financial room. In 2008 the United Kingdom raised the limit for its favourable SME scheme, including from 249 to 499 employees. Businesses that gained the higher rate as a result did more R&D and patented more, and that effect lasted up to seven years. The large effects came mainly from businesses that found it hard to obtain financing (Dechezleprêtre et al., 2023).

In 2004 Canada changed the rules on who qualified for its R&D tax credit for small private businesses. Among the businesses that became eligible as a result, total R&D rose by 17%. The effect was larger for businesses that received the credit as a refund, because they owed no tax (Agrawal, Rosell & Simcoe, 2020). So for a small business, what matters most is whether the benefit actually arrives as cash.

A meta-analysis (a study that weighs the results of many earlier studies together) shows that the effect of R&D tax credits differs by type of business. On average, the extra effect was stronger for SMEs, service firms and firms in low-tech sectors in countries with a scheme that rewards growth in R&D (Castellacci & Lie, 2015). The WBSO rewards the level of your S&O, not its growth.

Why does part of the WBSO benefit leak away?

Because not every business pays enough payroll tax to offset the credit. Each year, an average of 6% of the WBSO credit granted goes unused. About half of that, some 40 million euros, is because the payroll tax is lower than the credit the business is entitled to (SEO & Dialogic, 2025).

Starters suffer most from this. In 2022, 28% of starters could not fully use the benefit granted to them, compared with 7% of other businesses (SEO & Dialogic, 2025). A young business often has few people on the payroll, and therefore little payroll tax to offset the credit against.

The other half is lost through processing errors. A business, or its accountant or bookkeeping firm, forgets the credit in full or in part in the payroll tax return. Or it settles a correction in a later period than the one it belongs to (SEO & Dialogic, 2025). That part can be prevented with a fixed check on each return.

The researchers propose examining whether unused credit can be carried forward to the following year. In its response of April 2025, the government announced that it would have this examined, together with other changes (letter to parliament, 2025).

Does more research also lead to more innovation?

Usually yes, but not always in the form of patents. In the British research, the tax credit led to more patents, also when their quality is taken into account. Businesses that were technologically close to the supported firms also innovated more (Dechezleprêtre et al., 2023). This spread of knowledge to other businesses is called a knowledge spillover.

In Norway, projects with an R&D tax credit mainly led to new production processes and, to a lesser extent, to new products for the firm itself. The researchers found no clear effect on products that were new to the market, or on patents (Cappelen, Raknerud & Rybalka, 2012). So such a credit mainly helps with improvements within the business itself.

For the Netherlands, the evaluation estimates that the extra R&D from the WBSO produces an economic return of 2.6 to 3.1 billion euros a year in the long run. Between 23% and 64% of that comes from knowledge spillovers. In a survey, 70% of WBSO users say their projects lead to considerably more turnover from new products and services (SEO & Dialogic, 2025). A survey of users is, however, weaker evidence than a statistical comparison.

Does the credit go to extra research or to higher wages?

Part of it can end up in higher wages for researchers. Lokshin and Mohnen studied Dutch businesses between 1997 and 2004. When the WBSO covered a larger share of wage costs, the wages of R&D staff rose. A 10% increase in the share covered went with about 2% higher R&D wages in the short run, and about 2.4% in the long run (Lokshin & Mohnen, 2013).

For 2018 to 2022, the evaluation does not see that effect. In that period, the extra S&O wage costs came from more hours worked, and not from higher hourly wages (SEO & Dialogic, 2025).

This does point to a limit of any R&D credit. If no extra researchers can be found, a business can do little extra, however large the credit. The evaluation names the difficulty of finding suitable staff as one of the most frequently mentioned explanations for the smaller effect of the WBSO (SEO & Dialogic, 2025).

Why does the WBSO work less strongly than before?

The extra investment per euro of credit has become smaller over the years. For 2018 to 2022, the bang for the buck is a third to six tenths lower than for 2013 to 2017 (SEO & Dialogic, 2025). Earlier evaluations arrived at 1.77 for 2006 to 2010 and 0.9 for 2011 to 2017 (letter to parliament, 2019).

These figures cannot be compared one to one, because each evaluation used a different method. The direction is clear, though. The researchers name several possible causes: businesses struggle to find staff, more and more R&D costs fall outside the technical S&O definition, and other countries now have similar schemes (SEO & Dialogic, 2025).

The government first wants to sharpen the purpose of the WBSO. After that, it will have it examined whether an extra incentive for growth in S&O and carrying forward unused credit would strengthen the scheme. The fixed hourly wage (the standard hourly rate RVO uses when a business has no wage data for S&O staff yet) goes from €29 to €33 in 2027 (letter to parliament, 2025).

When does the WBSO give your business the most?

The WBSO gives you the most if you do technically new work on a structural basis and can actually offset the credit. The research points to a few factors that make the difference.

• Apply in advance. The WBSO only applies to work that has yet to start (RVO, 2026).
• Check whether your payroll tax is large enough. Starters run the greatest risk that part of the benefit goes unused (SEO & Dialogic, 2025).
• Check every payroll tax return for the credit. Half of the unused benefit comes from credit that was forgotten or settled incorrectly (SEO & Dialogic, 2025).
• Keep careful track of your S&O hours and costs. According to the evaluation, most of the administrative burden lies in recording and accounting for those hours and costs (letter to parliament, 2025).
• If you are self-employed without staff: the R&D deduction requires at least 500 hours of your own S&O a year (Belastingdienst).

According to the evaluation, 82% of the users surveyed find that the benefits of the WBSO outweigh the effort it takes (letter to parliament, 2025). Those who have used the scheme successfully and do S&O on a structural basis generally use it again every year (SEO & Dialogic, 2025).

Sources

• RVO, WBSO: rates and conditions 2026, Netherlands Enterprise Agency, consulted October 2026. rvo.nl
• Brouwer, E., De Jong, G., Content, J. (SEO) and Den Hertog, P. et al. (Dialogic) (2025). Evaluatie Wet Bevordering Speur- en Ontwikkelingswerk (WBSO) 2018-2022. Final report commissioned by the Ministry of Economic Affairs, February 2025. rijksoverheid.nl
• Belastingdienst, R&D deduction 2026 (Aftrek voor speur- en ontwikkelingswerk 2026), consulted October 2026. belastingdienst.nl
• Belastingdienst, R&D deduction: conditions (Aftrek voor speur- en ontwikkelingswerk), consulted October 2026. belastingdienst.nl
• Lokshin, B. & Mohnen, P. (2012). How effective are level-based R&D tax credits? Evidence from the Netherlands. Applied Economics, 44(12), 1527-1538. doi.org/10.1080/00036846.2010.543083
• Minister of Economic Affairs (2025). Government response to the WBSO evaluation 2025. Parliamentary papers II 2024/25, 32637, no. 670, 3 April 2025. officielebekendmakingen.nl
• Dechezleprêtre, A., Einiö, E., Martin, R., Nguyen, K.-T. & Van Reenen, J. (2023). Do tax incentives increase firm innovation? An RD design for R&D, patents, and spillovers. American Economic Journal: Economic Policy, 15(4), 486-521. doi.org/10.1257/pol.20200739
• Agrawal, A., Rosell, C. & Simcoe, T. (2020). Tax credits and small firm R&D spending. American Economic Journal: Economic Policy, 12(2), 1-21. doi.org/10.1257/pol.20140467
• Castellacci, F. & Lie, C.M. (2015). Do the effects of R&D tax credits vary across industries? A meta-regression analysis. Research Policy, 44(4), 819-832. doi.org/10.1016/j.respol.2015.01.010
• Cappelen, Å., Raknerud, A. & Rybalka, M. (2012). The effects of R&D tax credits on patenting and innovations. Research Policy, 41(2), 334-345. doi.org/10.1016/j.respol.2011.10.001
• Lokshin, B. & Mohnen, P. (2013). Do R&D tax incentives lead to higher wages for R&D workers? Evidence from The Netherlands. Research Policy, 42(3), 823-830. doi.org/10.1016/j.respol.2012.12.004
• State Secretary for Economic Affairs and Climate Policy (2019). Letter on the evaluation of the WBSO 2011-2017. Parliamentary papers II 2018/19, 32637, no. 358, 11 April 2019. officielebekendmakingen.nl