Deductions for R&D+I

Tax deductions for R&D+i are an indirect financing mechanism for innovation that allows you to considerably reduce the fees to be paid in Corporation Tax, through a return on expenses incurred in an  R&D+i project.

This tool has effects comparable to those of a subsidy, but is not taxed. Free to apply, it is compatible with other grants or subsidies and its scope will be in accordance with the innovation project.

The percentage of return covers up to 59% of R&D expenses and 12% for IT incurred in the same project. The amount that the startup, SME or large company receives will be exponential to the certified expenditure in one or another category.

Advantages

• Effects comparable to the subsidy, but not taxed.
• Proportional incentive for R&D activities.
• Free and general application for all types of companies.
• Compatible with public aid.
• Possibility of application in subsequent exercises.
• Added value compared to the competition.

SERING, as a consulting company, offers you maximum profitability and legal certainty in carrying out your tax deduction files for  R&D+i We encourage you to contact us and we will analyze your situation without obligation.

What They Are and Beneficiaries

Tax deductions are one of the instruments enabled by the General State Administration to promote certain activities. In this case, tax incentives are focused on promoting research, development and innovation.

It is regulated by RD 1432/2003 and currently constitutes one of the most important existing aid for both SMEs and large companies.

This incentive is applied in Corporation Tax and is intended for companies that are investing in research, development and innovation.

 

 

Compared to other promotion techniques, tax deductions have the following advantages:

   - They have economic effects comparable to those of the subsidy, but they are not taxed.
   - The application is free and general as it is not subject to competitive competition with a predefined budget.
   - The tax deduction is proportional to the R + D + i activities carried out. It also fits its application in subsequent exercises.

Recently, the "Law to support entrepreneurs and their internationalization" has established the possibility of applying deductions for R + D + i without these having to be subject to any limit on the full amount of Corporation Tax, and, accordingly In this case, they can proceed to its payment, with a joint maximum limit of 3 million euros per year, although a discount rate of 20% must be applied with respect to the amount initially foreseen in the deduction.

Thus, the benefits of applying the tax incentive are multiple:

    -Full accessibility, since it can be applied by any company or taxpayer that has to carry out the Corporation Tax.
    -Possibility of recovering between 12% and 59% of the project's deductible expenses.
    -Possibility of requesting the payment of deductions in case of insufficient quota (companies in losses or with accumulated tax credit) for projects carried out as of January 2013.
    -They can be applied for up to 18 years and accumulate tax credit.
    -Compatible with public aid and the incentive of article 23 of the TRLIS (Patent Box).
    -They are not taxed.
    -By obtaining the Binding Motivated Report (IMV), they offer full fiscal and legal security.
    -Immediate financial effect on Net Income and Shareholders' Equity.

SERING, as a consulting company, offers you maximum profitability and legal certainty in carrying out your tax deduction files for R + D + i. We encourage you to contact us and we will analyze your situation without obligation.

THE IMV

The reasoned reports that are binding for the Tax Administration consist of the qualification of the R&D+I activities and their associated expenses. In this way, it is possible to overcome uncertainty and have legal certainty in the face of a potential inspection by the Tax Agency.

These reports are based on article 35 of Royal Legislative Decree 4/2004, of March 5, which approves the revised text of the Corporation Tax Law.

The deadline for applying for the IMV coincides with that for filing the Corporation Tax (July 25 for taxpayers whose tax period coincides with the calendar year; or, in general, 6 months and 25 calendar days after the end of the tax period) .

Obtaining the IMV is not immediate and requires applying resources for the development of a series of technical-economic reports that certify the R&D+I activities carried out and justify the potentially deductible expense.

 

El proceso a seguir es el siguiente:

At SERING, we fully manage all national tax relief files for our clients for activities related to R & D & i. Our success lies in the: Identification of all those activities susceptible of qualification of R + D + i. Carrying out an analysis and diagnosis of the expenses incurred in R + D + i, both for the current year and for previous annuities. Preparation of the technical-economic reports of the R + D + i projects that justify the deduction generated. Processing and obtaining the IMV from the beginning of the process, including intermediation with ENAC certifiers. Therefore, at SERING we are experts in leading this typology of files from the initial approach with a full success rate in obtaining IMV in order to provide security in the application of the tax incentive. We encourage you to contact us and we will analyze your situation without obligation.

Tax simulation

The company “XYZ” contacted SERING to optimize its tax benefits for the closing of the Corporation Tax of the annuity.

SERING, goes to the facilities of the company "XYZ" to analyze the activities and expenses incurred during the annuity and that may have an R + D + i component.

After a personalized diagnosis, SERING identifies a potential project that can be taxed via article 35 of the TRLIS.

SERING carries out the technical-economic reports for the company "XYZ" and prepares the necessary documentation to have a conclusive technical report from a Certifying entity accredited by ENAC.

Said Certifying entity, after analyzing the technical-economic documentation carried out by SERING, qualifies all the activities carried out as R&D, approving a total expenditure of € 150,000.

Once the project is certified, SERING makes the request for a Binding Motivated Report to the Ministry for its issuance to the company. The Ministry ratifies the qualification of the activities and the expenditure approved by the Certifying entity, without suffering any cuts and issues the IMV of the project.

SERING, performs the tax simulation to the company "XYZ" in relation to the processed file and this, which previously had never applied the tax incentive, obtains a tax deduction of € 66,400 applicable in its IS:

INVESTIGATION AND DEVELOPMENT

Project Expenses

    Amortizations € 5,000.00
    Personnel Expenses € 120,000.00
    Expenses of personnel dedicated exclusively to R&D € 20,000.00
    Personnel expenses attributable to € 100,000.00
    Expenses in activities carried out by third parties € 15,000.00
    Expendable material expenses € 10,000.00 Other expenses: indirect costs, allowances, training, etc. - €
    Total Expense € 150,000.00 Grant - €
    Reduction for Subsidies 65% Deduction base € 150,000.00
    Average expenses 2 previous years
    Excess over the average of two previous years € 150,000.00
    Deduction up to average 2 previous years 25% € 37,500.00
    Average excess deduction 2 previous years 17% € 25,500.00
    Additional Deductions Personal exclusively 17% € 3,400.00
    TOTAL R&D DEDUCTION € 66,400.00

In this case, thanks to the collaboration of SERING, the XYZ company has recovered via tax deduction for R & D & I activities more than 44% of the expense made to achieve the project.