In the annual income tax declaration for 2016 entrepreneurs have the possibility to settle a new tax relief for research and development works (R & D). Such opportunity appeared for the first time.
Costs incurred in 2016 on R & D allow getting the bonus in the form of an additional deduction of eligible costs from the tax base. Thus, entrepreneurs can reduce the tax that must be paid to the Treasury.
According to experts from KPMG International, R & D works are understood by the legislator as activities connected with improvement of technologies or development of new technologies / processes / products.
The new relief for R & D allows to take into account the calculation of income tax:
– 130% of salary costs of employees involved in research and development works (150% since 2017),
– 110% (130% since 2017) for large enterprises, or 120% (150% since 2017) for SMEs of other eligible costs associated with research and development works (including depreciation).
The new tax relief for R & D can be commonly used by entrepreneurs because:
– There is no need to have a dedicated R & D department,
– Each industry is eligible for the relief (IT, food, production, chemical, pharmaceutical, service, etc.)
– There are no selection criteria for projects – Entrepreneur only needs to carry out R & D works,
– There is no requirement to establish a groundbreaking solution in the world or European scale as in the case of grants, you only need innovations on the scale of a given enterprise.
With this relief one may cover all costs incurred in a given year on R & D activities. It can also be combined with grants. Intention of using the relief or discernment in the specific costs do not require prior notification within a year (as it is with grants). Costs of the projects, which have not been successful are also eligible for this relief. As reported by KPMG International, the new R & D relief will be accounted in the annual tax return CIT, accompanied by a new annex CIT-BR.
Source: Newsletter of the Club 150