What's the difference between the Innovation Credit and the WBSO?

The WBSO is a tax benefit delivered via payroll tax or income tax; the Innovation Credit is a repayable loan, not a tax benefit.

Can you combine the Innovation Credit with the WBSO?

Yes, the two schemes can complement each other well, as long as you don't claim the same hours or costs twice.

Innovation Credit

Definition

The Innovation Credit is an RVO financing scheme that lets companies obtain a loan for developing promising but high-risk new products, processes or services. The fundamental difference from the WBSO lies in the nature of the benefit: the WBSO is a tax scheme that lowers your wage costs through a reduction on payroll tax or a deduction in income tax, whereas the Innovation Credit is repayable financing — there is no lasting tax benefit, but funding your company eventually pays back. The instrument is meant for the phase in which the technical feasibility of an innovation is not yet established and regular financiers, such as banks, are reluctant because of the risk involved. The Innovation Credit is separate from the WBSO, but the two schemes can complement each other well within the same development trajectory: the WBSO lowers the ongoing wage costs of your R&D work, while the Innovation Credit funds the broader development investment. Combining it with the WBSO and other schemes such as the MIT is possible, as long as you don't claim the same hours or costs twice across different schemes. For companies that need capital, not just tax benefit, to actually bring an innovation to market, the Innovation Credit is therefore a logical complement to the WBSO.

Frequently asked questions

What is the Innovation Credit?: The Innovation Credit is an RVO loan for developing promising but high-risk new products, processes or services.
What's the difference between the Innovation Credit and the WBSO?: The WBSO is a tax benefit delivered via payroll tax or income tax; the Innovation Credit is a repayable loan, not a tax benefit.
Can you combine the Innovation Credit with the WBSO?: Yes, the two schemes can complement each other well, as long as you don't claim the same hours or costs twice.