Are you a business owner looking to reduce your taxes?
We can help you minimise your tax burden by claiming tax deductions and social security rebates with complete legal certainty.
Tax deductions
The first step is to assess whether your company’s activities fall under the categories of Research and Development (R&D) or Technological Innovation (TI). At a2d Innova, we specialize in determining eligibility in accordance with current legislation.
R&D · Research and Development
Research is defined as
Planned original enquiry aimed at discovering new knowledge and a better understanding in the field of science and technology.
Development is defined as
The application of the results of research or any other scientific knowledge for the manufacture of new materials or products, the design of new processes or production systems and the substantial technological improvement of pre-existing materials, products, processes or systems.
The materialisation 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 commercial exploitation.
The design and preparation of the sample book for the launch of new products:
- Launching a new product: its introduction on the market.
- New product: a product whose novelty is essential and not merely formal or accidental.
Software companies
The creation, combination and configuration of advanced software, by means of 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 is assimilated to this concept, when it is carried out on a not-for-profit basis.
It does not include usual or routine activities related to software maintenance or minor software updates.
Binding Reasoned Report
The Binding Reasoned Report certifies that your project or activity qualifies as R+D+i. It enables the justification of tax deductions for certified expenses in the Corporate Tax and is binding for the Ministry of Finance.
To request a Binding Reasoned Report certifying that your project or activity qualifies as R&D&I, we must follow these steps:
1- We compile all the documentation related to your R&D&I project, including details of the objectives, methodology, research team, timeline and resources involved.
2- We certify the R&D projects by an ENAC accredited entity.
3- We contact and submit the documentation to the Ministry. We ensure that we comply with the deadlines established for the submission of applications.
4- We obtain the binding reasoned report that will accredit that your project or activity is considered R&D or Ti in accordance with the legislation. This report will be essential when applying for tax credits and deductions related to research and development.
Ti · Technological innovation
Technological innovation is defined as
The activity whose result is a technological advance in obtaining new products or production processes or substantial improvements to existing ones. Products or processes whose characteristics or applications, from a technological point of view, differ substantially from those existing previously, will be considered new.
The materialisation of new products or processes in a plan, scheme or design, the creation of a first non-marketable prototype, initial demonstration projects or pilot projects (industrial design and production process engineering).
Including those related to:
1- Animation and video games..
2- Samples, provided that they cannot be converted or used for industrial applications or commercial exploitation:
- Textile sector, footwear industry, tanning industry, leather goods…
- Toy sector
- Furniture and wood sector
3- Technological diagnosis activities aimed at identifying, defining and guiding advanced technological solutions, irrespective of the results.
4- The acquisition of advanced technology in the form of patents, licences, know-how and designs. Amounts paid to persons or entities related to the taxpayer shall not give entitlement to the deduction. The base corresponding to this concept may not exceed the amount of 1 million euros.
Table of R&D / TI deductions
The percentages of tax deductions for R&D&I project activities are stipulated by law, and are different depending on whether they are qualified as R&D or TI projects.
Tax savings
Tax incentives in corporate tax allow companies to apply a deduction percentage of up to 59%.
- We identify the projects that are eligible for tax deductions,
- We prepare the technical and accounting documentation required to obtain the R&D or IT qualification.
- We accompany and resolve non-conformities in the certification of the project by an agency accredited by ENAC.
- We process the binding reasoned report before the tax agency, offering maximum legal certainty for our clients. This report allows us to justify tax deductions of the certified expenses in the Corporate Tax, and is binding for all public administrations.
- We apply the corresponding tax deductions and manage them so that you obtain the maximum benefit.
How do tax deductions work?
1
The company incurs expenses and investments related to R&D&I projects during the fiscal year. They may include researchers’ salaries, costs of materials, investment in technology, among others.
2
Annual corporate tax return:
At the end of the tax year, the company prepares its corporate income tax return. In this return, it can include the expenses and investments made in R&D&I.
3
Application of deductions:
Based on these expenses, the company applies specific tax deductions for R&D&I. These deductions directly reduce the amount of corporate tax the company has to pay.
4
Since the deductions are applied annually, the company can benefit from them every tax year that the project is active. It is not necessary to wait until the end of the project to start receiving the tax benefits.
What are the advantages of R&D&I tax deductions?
- Tax deductions qualified as R&D&I are a company’s right, there is no limit to the number of companies that can apply for them. Companies have 18 years to apply for tax deductions.
- They are a source of financing that allows, under certain circumstances, for the deductions generated in one or more years to be applied and the remaining amount to be paid by the tax office.
- Projects can be multi-annual and multi-objective.
- Tax deductions are not taxed and are compatible with other aid.
- The deduction percentages are very high compared to other forms of aid.
- They offer total fiscal and legal security because the company already has a binding reasoned report from the beginning of the process.
Don’t miss the opportunity to boost your ideas!
FAQ’s
What percentage can I deduct in corporation tax?
Are tax deductions for R&D&I applied during the project or after completion?
These deductions can be applied during the execution of the R&D&I project, as related expenses are incurred. Typically, they are applied at the end of the fiscal year in which the expenses were incurred. This means that a company can benefit from these deductions year after year, throughout the duration of the project and after its completion.
What is the binding reasoned report?
The binding reasoned report is a document issued by the Ministry of Science and Innovation that certifies that a specific project or activity qualifies as R&D&I. It guarantees that an R&D&I project has been technically and economically audited, and as it is binding, it acts as a legal insurance that gives companies more security in the face of inspections by the Tax Agency.
What documentation is required to apply for a binding reasoned report?
The documentation required may vary from jurisdiction to jurisdiction, but generally includes a detailed description of the project, evidence of the research and development work carried out, associated costs, and any other documentation that demonstrates the innovative nature of the project.
Can my company apply for R&D&I tax deductions if it has already benefited from other subsidies or grants?
Yes, it is possible to combine tax deductions with other subsidies or grants, although certain restrictions or limits on the accumulation of benefits may apply. It is important to check the current regulations or consult us to ensure that you meet all the requirements.
What is the deadline for requesting the binding reasoned report for deductions for R&D&I projects?
The deadline for requesting the binding reasoned report is before the 25th of July of the year following the tax year in which the tax deductions are claimed. It is crucial to comply with this deadline to ensure the application of tax deductions for R&D&I activities in the corporate tax return. At a2d innova consultancy we offer advice and support in the management and processing of these reports, ensuring that all the necessary requirements and deadlines are met.
What happens if my project is rejected for the R&D&I tax deduction?
In case of rejection, it is possible to review and adjust the submitted documentation and reapply for the binding reasoned report, provided that the causes of rejection are identified and corrected. a2d innova consultancy will advise you in this process to improve the chances of success in a new application.
What guarantees does a2d innova consultancy offer regarding obtaining a binding reasoned report?
At a2d innova consultancy we have a team of experts in the field and extensive experience in the preparation and processing of binding reasoned reports, which allows us to maximize the chances of success. However, the final decision rests with the competent Ministry.