How the box works

Profit from qualifying self-developed IP is taxed at an effective 9%, compared with the regular corporate rates (19% up to €200,000, 25.8% above). For most companies, the main condition is a granted WBSO declaration under the Dutch scheme for R&D wages. With this declaration, the development counts as qualifying. Larger taxpayers also need a patent or a similar right, such as a plant variety right. Software also counts, even when it is unregistered. Under the nexus principle, the benefit depends directly on the development work that your own company does.

The migration in four steps

  1. Set up or use your Dutch BV, with the development team in place. See BV incorporation and the first hires.
  2. Transfer or license the IP to the BV at arm’s-length value, the price that independent parties would agree. Document this early, while the values are still modest. See the transfer pricing basics.
  3. Apply for the WBSO declaration for the ongoing development. With the WBSO, the BV also gets part of its R&D wage costs back in cash.
  4. Agree the box with the Tax Administration: in a ruling, you fix the qualifying share of the profit upfront. You then know how much of the profit is taxed at 9%.

The effect on your profit

A software BV with €500,000 of qualifying profit keeps roughly €70,000 more per year in the box than at the regular rates (€45,000 tax, compared with €115,400). The BV keeps this saving every year in which it earns profit from the IP. Founders can also combine this with their own salary planning. A lower salary is allowed only in a few cases, but a loan from the BV can give you private cash. Meanwhile, the BV builds up profit in the box. See the salary design for a director-shareholder (DGA).

Is your group setting up a Dutch entity? See setting up a Dutch subsidiary for what you need, how long it takes and what the parent company must sign.

Combine with the US side

IP location is a group decision. US tax rules treat the foreign corporation's earnings under their own regimes, and the treaty keeps royalties between your entities at 0% withholding: the treaty guide covers this. Delaware and the Dutch BV together shows how the two structures match.