Job-related investment discount scheme withdrawn


October last year (2020) we informed you about the introduction of the Job-related investment discount (in Dutch: Baangerelateerde investeringskorting, BIK). With this scheme, the government intended to encourage entrepreneurs to continue investing. On 5 October 2020, the Cabinet had submitted the proposal for the Job-related investment discount (BIK) for this purpose. This bill was subsequently passed, which meant that the BIK had been introduced as of 1 January 2021.

However, last Friday, 28 May 2021, the government announced that the BIK will be retroactively withdrawn due to great uncertainty as to whether the BIK constitutes unauthorised state aid based on European law. The budget set aside for the BIK will now be used to reduce employer AWf (General Unemployment Fund) contributions in 2021.


The BIK allowed entrepreneurs (corporations and individuals) under certain conditions to offset part of their investments against their payroll taxes. The BIK was already applicable to investments of which the obligations were entered into as of 1 October 2020. An application had to be submitted to the RVO (Netherlands Enterprise Agency). However, filing applications would not start until 1 September 2021. The BIK was intended as a crisis measure to stimulate the business community to (continue to) invest, also during the corona crisis. The measure was to remain in force until 31 December 2022. 

All of this is now retroactively cancelled. Instead, it is proposed to use the budget of 4 billion that was reserved for the BIK (in principle, 2 billion in 2021 and 2 billion in 2022) to reduce the employer’s General Unemployment Fund contributions in 2021. 

Reason for withdrawal of the BIK

The Cabinet submitted a question to the European Commission (Commission) regarding a specific technical element of the BIK (namely, the application of the BIK in situations of a fiscal unity for corporate income tax purposes), asking whether the Commission agreed that this element could be considered permissible state aid. The government assumed that the BIK as a whole would not involve impermissible state aid. Informal consultations with the Commission revealed that it considered the entire BIK and could not guarantee that the BIK involved permissible state aid. Because of the uncertainty that has arisen about the sustainability of the BIK due to the EU law prohibition on state aid, the government has decided to withdraw the BIK. Through a reduction in the employer’s General Unemployment Fund contributions, the cabinet aims to support the business community in a different way.

What does this mean for your organisation?

What were you entitled to on the basis of the BIK?

For investments up to and including five million euros, 3.9 percent of the investment could be deducted from the wage tax. For larger investments this was 1.8 percent for the part over five million euros. By linking the investment deduction to the wage tax, companies that are currently loss-making (e.g. as a result of the corona crisis) could still have benefited from this scheme. This crisis measure was to last until 31 December 2022. To make use of the BIK, your organisation obviously had to meet several conditions.

Firstly, the size of the investment discount depended on the size of your investments. Secondly, the BIK was only applicable to investments in new assets and, thirdly, you had to have sufficient staff to be able to fully benefit from the BIK. The BIK could be applied in combination with other investment schemes such as the SME investment deduction (KIA), the energy investment deduction (EIA), the environmental investment deduction (MIA) and the voluntary depreciation of environmental assets (VAMIL).

The investment tax credit was designed as a deduction from payroll taxes: the BIK deduction. The intention was that the amount of BIK remittance reduction to which you would be entitled would be determined by the Netherlands Enterprise Agency. You would have had to submit an application for this. Because the application window would not open until 1 September 2021, no applications have actually been submitted at this time.

Reduction in employer's General Unemployment Fund contributions (AWf)

In order to still be able to support the Dutch businesses, the Cabinet proposes to use the budget that was reserved for the BIK (4 billion in total for the years 2021 and 2022) to reduce the employer’s AWf contributions. How this will be done (for example, by adjusting the percentages of the reduced and the normal AWf contributions) and what amounts this will involve at the level of your organisation as an individual employer, is not yet known. As soon as there is more information available, we will inform you through our Tax News articles.

Consequences (tax) accounting

Because the BIK would already apply to investments of which the obligations have been entered into as of 1 October 2020, it is possible that your organisation has already included the discount in the accounting records. For example, it may have already been accounted for by deducting it from the cost price of an investment that you have entered on the asset side of your (tax) balance sheet. In such a case, now that the scheme has been withdrawn retroactively, you should increase the cost price of the investment to the original amount. As a result, any deferred tax entries must also be corrected and your company will no longer have an amount of BIK receivable in its books. 

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