After the WBSO year ends, it's important to process the worked hours and ensure all documentation is in order. Here's how to handle this process effectively, considering the differences between solo entrepreneurs and companies with employees:
Solo Entrepreneurs: Solo entrepreneurs must document at least 500 hours of R&D work throughout the year to qualify for the fixed S&O deduction. This deduction is applied directly to your income tax declaration, and the number of hours beyond 500 does not affect the amount. Ensure that you keep detailed records of your projects and any discrepancies between the estimated and actual hours worked.Companies with Employees: Companies need to document R&D hours for each employee involved in R&D activities. These hours must be input into the company's wage tax administration and are used to calculate the wage tax reduction. The claim is submitted to the Dutch Tax Authority (Belastingdienst) based on the recorded hours, and companies need to follow the process to claim the tax reduction through payroll. Learn more about administration requirements. Updating Financial Administration: Both solo entrepreneurs and companies need to ensure that all related expenses are documented and aligned with the worked hours. This includes equipment purchases, material usage, and other costs associated with R&D activities. Accurate financial documentation is crucial for claiming the tax rebate or wage tax reduction. Check how much subsidy you can receive. Maintaining Project and Hourly Administration: Ensure that both project administration and hourly administration are up to date. Project administration involves tracking milestones, progress, and changes in scope, while hourly administration involves logging the time spent on R&D activities. Compliance with these requirements is crucial for claiming WBSO benefits and avoiding any issues during audits.Handling Fiscal Benefits: Solo entrepreneurs claim the fixed S&O deduction directly on their income tax return, while companies claim wage tax reductions based on the R&D hours worked. Ensure all forms are correctly filled out to receive the full benefits. See how much subsidy you can claim. Preparing for Possible Audits: Organize and store your documentation in case of an audit by the RVO. This includes ensuring both hourly and project administration are thoroughly documented and up to date. During an audit, the RVO will check that your claims are backed by evidence and meet WBSO compliance requirements.
Example 1
A company uses Traqqie to track time spent on R&D activities. They maintain detailed records of project progress, expenses, and milestones. This thorough documentation ensures compliance and prepares them well for audits.
Example 2
An organization meticulously documents all R&D activities, tracks expenses, and maintains compliance reports. Their organized records help them smoothly navigate an audit, validating their WBSO eligibility.
Negative Example 1
A company fails to maintain detailed records of their R&D activities. They do not track time or expenses accurately, leading to difficulties during an audit and potential disqualification from WBSO benefits.
Negative Example 2
An organization does not use any time-tracking software and relies on memory for tracking R&D hours. Poor documentation practices result in missing critical compliance reports and facing challenges during an audit.