Compared to other incentives for R&D&I, tax deductions offer the following advantages:
They have economic effects comparable to those of the subsidy, but are not taxed.
The application is free (all types of areas of knowledge and expenditure volumes), and general (for all companies, regardless of their CNAE or size).
Deductions are not subject to new zealand girls whatsapp number competitive bidding with a predefined budget; they are generated by each company when they carry out R&D and/or IT activities, in accordance with the definitions established in the Corporate Tax Law.
The generation of the tax deduction is proportional to the R&D&I activities carried out, and is applied in the annual liquidation of the corporate tax, up to a certain quota limit. However, the deduction generated but not applied can be applied in subsequent years, and there is even a case of monetary advance of the deduction pending application.
Corporate tax deductions to encourage research and development and technological innovation activities
Article 35 of Law 27/2014, of November 27 , on Corporate Tax , includes the measures that regulate tax deductions for R&D&i that are applicable for fiscal years beginning after 2015, while the rules on their application are included in article 39. This Law includes what was included in this regard in Law 14/2013, of December 27, on support for entrepreneurs and their internationalization (which included tax measures to support, among others, investment in new companies and R&D).
The deductions included in the corporate tax are:
1. Deduction of the full tax rate for research and development activities . Research and development means:
The planned original inquiry that seeks to discover new knowledge and a greater understanding in the scientific and technological field .
The development and application of research results or any other type of scientific knowledge for the manufacture of new materials or products or for the design of new production processes or systems.
The substantial technological improvement of pre-existing materials, products, processes or systems.
The materialization of new products or processes in a plan, scheme or design, as well as the creation of a first non-marketable prototype and initial demonstration projects or pilot projects, provided that these cannot be converted or used for industrial applications or for commercial exploitation.
The design and preparation of samples for the launch of new products. For these purposes, the launch of a new product shall be understood as its introduction into the market and a new product shall be understood as one whose novelty is essential and not merely formal or accidental.
The creation, combination and configuration of advanced software , using new theorems and algorithms or operating systems, languages, interfaces and applications intended for the development of new or substantially improved products, processes or services. Software intended to facilitate access to information society services for people with disabilities, when carried out on a non-profit basis, will be considered as such. Routine or usual activities related to software maintenance or minor updates are not included.
The basis for the deduction of research and development expenses will be the amount of these and, where applicable, investments in tangible and intangible fixed assets, excluding buildings and land.
Research and development expenses shall be considered those incurred by the taxpayer, including the depreciation of assets assigned to the aforementioned activities, insofar as they are directly related to said activities and are effectively applied to their performance, being specifically listed individually by project.
The deduction percentages are:
1. 25 percent of the expenses incurred in the tax period for this concept.
In the event that the expenses incurred in carrying out research and development activities in the tax period are greater than the average of those incurred in the previous 2 years, the percentage established in the previous paragraph will be applied up to said average, and 42 percent on the excess with respect to this. In addition to the deduction that proceeds in accordance with the provisions of the previous paragraphs, an additional deduction of 17 percent of the amount of the entity's personnel expenses corresponding to qualified researchers assigned exclusively to research and development activities will be made.