If your company offers innovative solutions or invests in research and development, you should be aware of the tax deductions offered by the Spanish tax system for research, development and innovation activities carried out by commercial companies. In this article we tell you what R&D+i tax deductions are and what requirements you must meet to apply for them.
These deductions are a key instrument for promoting the growth and competitiveness of companies as they help to reduce their tax burden and reinvest in innovative activities.
What are R&D+i tax deductions?
Index of contents
Tax deductions for R&D+i are tax incentives that allow companies to deduct a percentage of the expenses and investments in research, development and innovation activities from their corporate income tax liability.
Research is considered to be inquiry aimed at discovering new knowledge in the scientific or technological field.
Development is the application of research results to the manufacture of new materials or products.
Finally, technological innovation is considered to be the activity whose result is an advance in technology for obtaining new products and production processes or substantial improvements to existing ones.
Requirements to qualify for R&D+i tax deductions
In order for a company to benefit from R&D+i tax deductions, it must comply with a series of requirements established by the Corporate Income Tax Law. Among these requirements, the following stand out:
- Identification of the activities. The activities must be identified as research, development or technological innovation, in the terms established in Article 35 of the Corporate Income Tax Law.
- Deduction base. It is composed of the amount of research and development expenses and investments in tangible and intangible fixed assets. Subsidies received for the same concept must be subtracted. In the case of innovation, the base is made up of technological diagnosis activities for advanced technological solutions, industrial design and engineering, patents, licenses and obtaining quality certificates (ISO 9000).
- Deduction percentage.
- In the case of research and development (R&D), the deduction is 25% of the expenses incurred in the tax period. If the R&D expenses exceed the average of the two previous years, the percentage is increased by 42% of the excess.
- 8% of investments in intangible tangible fixed assets.
- In the case of technological innovation, the deduction is 12% of the expenses incurred in technological innovation activities.
- Supporting documentation. The company must have the necessary documentation that accredits the expenses and investments in R&D+i activities and a reasoned report that supports the innovation, development or research.
- Certification. In some cases, it is necessary to obtain a certificate issued by an accredited entity that validates the R&D+i activities carried out, for example, the Ministry of Economy and Competitiveness.
Procedure to apply the tax deductions for R&D+i
The process to apply the tax deductions for R&D+i in the Corporate Income Tax has several steps which are the following.
- Identification of the expenses. Your company must identify those expenses and investments made in R&D+i activities and collect them.
- Accounting. The expenses and investments must be accounted for.
- Request for certification. If necessary, you will have to request the certificate that accredits the R&D+i activities.
- Corporate Income Tax filing. The next step is to include the tax deductions in the corporate tax return.
- Preservation of documents. It is important that you keep all the supporting documentation in case the Tax Agency asks you for information.
Additional benefits of R&D+i tax deductions
In addition to the reduction of the tax burden derived from corporate income tax for companies, tax deductions for R&D+i offer other benefits such as the following:
- Promotion of competitiveness. Companies that invest in R&D+i can become more competitive, because they develop innovative products and processes that allow them to differentiate themselves from their competitors in the market.
- Attraction of talent. Companies that are committed to R&D+i tend to attract and retain qualified talent, which contributes to the growth of the company and to fostering the team’s sense of belonging.
- Corporate image. Investment in innovation and development improves the company’s image by conveying its commitment to technological progress and sustainability.
As a consequence of all the above, tax deductions for R&D+i are an essential instrument to promote innovation and technological development in Spanish companies. If you want to take advantage of these incentives and reduce your tax burden, do not hesitate to contact our team of expert tax advisors to analyze your case, verify if you meet the requirements and carry out all the procedures to apply the deduction in the corporate tax.
