In this new post we want to talk about a very interesting topic for all those who carry out innovative activities, regardless of size, turnover or activity sector. Tax deductions for R&D&I allow to reduce the full share of the corporation tax and there are still few companies that apply them.
According to the Altran Innovation Index, Spain is a European country with a low innovation capacity, investing around 1,24% of its GDP. However, to compensate for this, there are numerous tax deductions that any innovative company can apply and which make the Spanish R&D&I Tax deductions system one of the most powerful in the OECD framework, as set out in Law 27/2014, Art. 35.
DEDUCTION FOR RESEARCH AND DEVELOPMENT ACTIVITIES
Generally, 25% of the expenses incurred in conducting research and development activities during the tax period may be deducted. If these expenses are higher than the average of those carried out in the two previous years, 25% will be applied in this measure and 42% will be applied to the excess in relation to this one.
In addition to this deduction, an additional deduction of 17% of the amount of staff costs will be made to qualified researchers assigned exclusively to research and development activities.
8% of investments in tangible and intangible fixed assets (excluding buildings and land) subject to research and development activities may also be deducted.
DEDUCTION FOR TECHNOLOGICAL INNOVATION ACTIVITIES
Technological innovation activities, such as technological diagnostics, industrial design and production process engineering or the acquisition of advanced technology (licenses, patents, designs …), will give a reduction rate of 12% of Expenses incurred in the tax period.
Some of the activities that may be susceptible to generate a tax deduction are the significant improvements in production processes, the incorporation of existing technologies that imply a significant improvement for the company or the development of new products and improvement of existing ones, among others. For this, tax deductions must be applied in model 200 (Corporate Tax) and filed before July 25.
This is undoubtedly a good way to reward all those innovative companies – SMEs and large companies – thus increasing their competitiveness and encouraging the continuous improvement of their products and processes by maximizing their benefits. More info here.