Income and other benefits for the Netherlands as a partner in the JSF programme
Participation in the JSF programme also generates income in the form of royalties on sales and exports of JSF aircraft, discounts on the purchase price paid by the Netherlands and remittances from the Dutch aerospace industry.
Royalties on JSF exports
Partner countries can recoup some of their investments in the development and production of the JSF in the form of royalties. This is because non-partner countries are required to pay a surcharge for the development costs, which the partner countries then distribute on a pro rata basis, in accordance with their share in the development of the JSF. This income is classified as ‘royalties’. The formula for the allocation of the royalties among the partner countries is reviewed once every two years, based on the investments made by each country in the JSF programme to date. The Netherlands is one of the countries entitled to royalties, which are paid in the year in which the aircraft are delivered.
In terms of royalties, countries fall into two categories: royalty-receiving countries, i.e. the partner countries in the JSF programme on the one hand and royalty-paying countries, i.e. non-partner countries that have ordered the JSF on the other.
How much does the Netherlands receive in the form of royalties?
The Netherlands receives around USD 223,000 per aircraft in royalties and around USD 30,000 per engine (figures as at September 2018). In 2012, the Dutch Ministry of Defence estimated the total amount of revenue earned from royalties at USD 418 million. This consists of:
The estimate was based on the planning dollar exchange rate at the time (USD 1 = €0.7750).
Discount on aircraft bought by the Netherlands
As a partner country in the JSF programme, the Netherlands qualifies for two types of discount on the JSFs it buys:
- a discount on account on the Dutch contributions towards the development costs;
- a discount on the fee charged by the US administration for selling weapons systems.
The discounts are worth around 5% of the price of the aircraft.
Remittances from the Dutch aerospace industry
The value of the royalties and discounts will in all probability not be sufficient to offset the payments made by the Netherlands towards the cost of developing the JSF. It was for this reason that the Dutch government signed an agreement with the Dutch aerospace industry in 2002. The thinking was that, as aerospace companies benefit from the Dutch involvement in the JSF programme, so they should also contribute towards the investments involved. Since then, therefore, Dutch aerospace companies have paid remittances to the Dutch state. These take the form of a percentage of the turnover earned by the companies in question from JSF-related orders.