R&D relief, introduced in 2016, allows enterprises to claim tax preferences without having to complete extensive applications or maintain complicated accounting documentation. Enterprises conducting research and development activity can claim an additional deduction of eligible expenses from their tax base, thus reducing their tax obligations for the tax year.
A taxpayer intending to claim R&D relief should also examine whether its activity can be regarded as:
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For the majority! If you are expanding your product line to include new goods or services, or modifying existing goods and services, it is highly likely that you meet the conditions to claim R&D relief. The results of your efforts need not be entirely new and innovative solutions.
You can claim R&D relief if you are a taxpayer who meets the following conditions:
You cannot claim the relief if:
An employee’s salary when on annual holiday, sick leave, or other justified absence should also be regarded as an eligible cost for R&D relief.
Expenditures can be deducted pro rata to the partner’s share in the profit of the partnership.
The regulations do not address how to carry forward eligible costs for R&D relief to future years. The taxpayer is thus free to make a division, in particular by applying pro rata the eligible costs in general and those associated with R&D centres.
During the course of the year, a taxpayer enjoying R&D relief need not inform the tax office that it is conducting such activity. Information on claiming the relief is included in the annual tax return.
No, an organization can also conduct R&D work for its own use.
Examples of activities qualifying as R&D:
A fixed catalogue of eligible costs is set forth in Art. 18d of the Corporate Income Tax Act or Art. 26e of the Personal Income Tax Act. These costs are essentially expenditures aimed at financing the appropriate infrastructure, specialized personnel, IP rights, and other processes, as well as expenditures related to the conduct of R&D activity broadly.
Taxpayers with the status of an R&D centre have greater benefits in the event of claiming R&D relief. One of them is the possibility to recognize additional costs as eligible expenditures, e.g. depreciation of buildings, other structures, and separately owned premises, used to conduct R&D activity, and costs of expert opinions, advisory services, and the like obtained from entities other than scientific institutions.