S&O declaration

Definition

The S&O declaration is the RVO decision issued once a WBSO application is approved. It states exactly how many research-and-development hours (R&D hours) are granted, for which projects and which period, and which financial benefit follows: a reduction on the payroll tax employers remit, or a fixed R&D deduction in income tax for sole traders who meet the hours criterion. Without an S&O declaration you cannot cash in the WBSO benefit — the declaration is the supporting document you process in your payroll tax return or income tax return. The declaration covers the application period you requested, typically between 3 and 12 months, and is based on an estimate of the R&D hours and costs you expect to make. After the calendar year ends, you compare that estimate with the hours actually realised through the realisation report, unless you qualify as a sole trader for the exemption from that requirement. Throughout the project you must also keep proper hour records and project documentation to substantiate the declaration in case of an audit. For companies that also want to use the innovation box, the S&O declaration is usually the entry ticket: without it, there is no access to the reduced 9% corporate-tax rate on innovation profit.

Frequently asked questions

What is an S&O declaration?

An S&O declaration is RVO's decision stating how many research-and-development hours have been granted for your project(s) and which WBSO benefit follows from that.

How do you use an S&O declaration to receive WBSO benefit?

Employers process the S&O declaration as a reduction on the payroll tax they remit in their payroll tax return; sole traders who meet the hours criterion use it to claim the fixed R&D deduction in income tax.

What do you need to do after receiving an S&O declaration?

You keep proper hour records and project documentation, and after the calendar year ends you submit a realisation report with the hours actually spent, unless you are exempt as a sole trader.