Everything you need to know about tax deductions for R&D&i

The Tax Deductions for R+D+i aim to reward the effort made by companies in the development of innovative activities.

The Tax Deductions for R+D+i aim to reward the effort made by companies in the development of innovative activities. 

Since it is applied directly to the amount of tax due and not the tax base, considerably reducing the amount of tax due, it may be the most intriguing deduction for businesses.

In the following article, our expert team in this area answers the most frequent questions asked by those interested in deductions, in the common territory (except in Navarra and the Basque Country).

Are Tax Deductions for R&D&i interesting for all types of entities?

Any Corporation Tax taxpayer who engages in innovative operations may use them, with the exception of foundations.

Can any type of company apply them?

Any business, regardless of size, turnover, or industry, can implement them.

What types of expenses are part of the deduction base?

Own labor, resources, subcontracting, etc. that are specifically related to and used for a given project. Therefore, this strategy does not account for indirect costs (such as general expenses).

Is it compatible with other types of incentives such as grants and loans?

Yes, but only insofar as subsidies must be deducted from the deductible base before the associated deduction percentages are applied.

Said subsidies must be attributable as income in the tax relief service period of the deductible R&D expenses.

 Though their imputation falls during the same tax year.

They must also be written off from the deductible base for these reasons, even if they are unfunded subsidies for the R&D&i expenses that are written off.

When it comes to loans, it is important to consider the equivalent subsidy of receiving a loan in better market conditions if the loan is provided at a lower interest rate than those that the company typically processes.

What are the deduction percentages applicable to expenses incurred for research and development activities?

In general, 25% of the expenses incurred in the tax period for this concept.

If the expenditures incurred for conducting research and development activities during the tax period exceed the average of the costs incurred over the previous two years.

Up to the average expense level and 42% on any excess, the percentage mentioned in the preceding clause will be used.

Moreover to the deduction made in accordance with the terms of the earlier paragraphs.

Additional personnel costs incurred by the entity for competent researchers who are only employed for research and development will be deducted by 17%.

And those of Technological Innovation?

For this notion, 12% of the costs incurred during the tax period will be the applicable deduction percentage.

Do I have to be in benefits to apply the Tax Deductions for R&D&i?

You are 18 years old from the time you carry out the R+D+i activities to benefit from the incentive.

But if what you need is immediate liquidity, with a loss of 20% of the deduction.

The Treasury pays you 80% of the deduction that you correspond, provided that you meet a series of conditions.

What requirements must be fulfilled in order for the Treasury to give me 80% of the money?

(also known as monetization, tax check, or tax credit)?

because the deduction cannot be used until at least a year after the end of the tax year in which it was created but not claimed.

that in the 24 months following the end of the tax period to which it is applied.

There is no decrease in the average number of employees at the company or, alternatively.

For R&D&I expenses and investments in tangible or intangible assets that are only used for the aforementioned activities,

An amount equivalent to the applicable or paid deduction is set aside.

  • That the entity has obtained a binding reasoned report on the qualification and valuation of the expenses of the activity such as research and development or technological innovation.

What is a binding reasoned report?

The actions of a project are categorised as R&D and/or technological innovation in a motivated binding report, which is a document made by qualified entities.

In addition, they can collect the expense or budget of the project.

What are binding reasoned reports for?

The Binding Motivated Reports guarantee that an R&D&i project has been technically and economically audited, and they are binding.

They work as legal insurance that gives more security to companies before inspections by the Tax Agency.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button