FI Group Tax 2023

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com
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©2023 FI Group (F. Iniciativas I+D+i, S.L. - B62331160). All rights reserved.
Index
4 Preface
5 Statement on corporate engagement
6 R&D tax incentives intensity map
International R&D Tax incentives chart
FI Group Offices
Operational Hubs QUALIFIES FOR NEXT REDUCED
TAX CREDITS/ CASH GRANTS PATENT
HORIZON EUROPE GENERATION SOCIAL SECURITY
Partnership Network DEDUCTIONS AND LOANS BOX
FUNDING EU FUNDS CONTRIBUTIONS
7 Europe
8 Spain
11 France
14 Portugal
17 United Kingdom
20 Belgium
23 Italy
26 Germany
29 Ireland
32 Switzerland
35 Poland

38 America
39 Canada
42 USA
45 Brazil
48 Chile
51 Colombia
54 Uruguay
57 Peru
60 Argentina
63 Asia
64 Japan
67 Singapore
70 Australia
73 Next Generation EU Funds

76 FI Goup Internationl network & philosophy
77 Glossary
78 Directory
Click on the country to be directed to the content.

Preface
For more than twenty years, FI Group has been helping companies all
over the world to finance their innovation through the management
of R&D tax incentives and other financial sources. As such, it seemed
natural for us to publish our guide to international R&D tax schemes
available for companies willing to achieve competitive advantages
through
innovation.

Current studies from the OECD highlight that R&D tax incentives directly
supported
by governments lead to an increase in R&D investments (for businesses
of all sizes
& sectors), a greater impact on companies’ competitiveness and a
decisive
social added-value through employment creation. As such, the positive
impact of innovation tax incentives is now broadly recognized to such
extent
that countries such as Germany and Switzerland, known as innovation
leaders and without R&D tax systems until recently, launched their own
to
take advantage of these mechanisms.

The amplitude and magnitude of R&D tax support is inherent to each

country; however, it is usually understood that R&D tax incentives seek
to impact taxpayers on three levels; tax credits and deductions, social
security reductions and the Patent Box are complementary schemes
that cover all financial aspects of an R&D project’s lifecycle. To identify
and leverage opportunities to benefit from such incentives, FI Group has
released this guide as a reliable source of information for future
claimants.

This compilation is an excellent illustration for the reader of our expertise

as a specialist in R&D financing. It has enabled us to articulate our
experience, gathered with multiple tax administrations and research
institutions, in order to share it with our clients, partners and contacts.

This third edition of the international guide covers 20 countries where FI

Group operates and follows the same structure for each country:
overview
of R&D performance, main R&D tax systems, and other incentives which
are of
the highest value for companies investing in innovation.

The information was collated in February 2022 using the latest legislative
data
available at that time. Future versions will be published regularly,
following legislative
changes.
4
Statement on corporate engagement
MANIFESTO for post-COVID economic and social recovery
The economic and social consequences of the pandemic crisis caused by COVID-19 are
more than obvious, and universal in scope. There has not been a single corner of the world
where the pandemic has not provoked a profound crisis at all levels. Not a single economy,
rich or poor, has remained unscathed.

The pandemic has also unexpectedly placed us in front of our own mirror as a society,
leading us to rethink our way of life, our economic, leisure and transport models, and
making visible, to an even greater extent, the delicate state of health of the planet we
inhabit. We have suddenly become aware of many things that we had been ignoring or
putting off for a long time.

Within this context, vaccines offer a glimmer of hope in a hard-hit and very fatigued
society. Their rapid development (in less than a year) has shown that R&D&I is a key
element of progress and a great ally for recovery. The support policies of Public
Administrations and Governments appear vital for the reconstruction of a society that has
been attacked and whose hope of recovery necessarily depends on the capacity of
Governments to promote a new economy based on knowledge, and on a change of social
and productive model. All this without neglecting, of course, the sustainability of our
actions and remaining respectful in everything we do of caring for the planet on which
we live.

Within this framework, we believe and state that FI Group has a key role to play. And
this role is worldwide in scale. Our principle purpose is "Helping Ideas Grow", something
that now makes more sense than ever. But we also want to claim that at this moment,
we are part of the solution.

For more than 20 years, we have worked all over the world to financially facilitate the
development of R&D&I projects of companies and public administrations, to connect
innovation agents, to promote investments with technological added value and that
generate quality employment, and to be a reliable source of consultation for Governments
when creating and sharing our knowledge to improve public policies that encourage R&D&I
spending.

The "FI Group Manifesto for post-COVID economic and social recovery" outlines FI Group's
intention to actively contribute to economic and social recovery worldwide, with a special
focus on all countries where the company provides services. Each of its points is focused on
establishing collaborations with Public Administrations and Companies so that recovery is
based on the axes of Research and Development, Innovation and Sustainability, and that
the impact of this recovery is tangible for the whole of society, with special attention paid to
social recovery through the generation of quality and purposeful employment.
F. Bouté X. Cazabon
5 FI Group Founder FI Group Co-Founder
R&D tax incentives intensity map
>30%
15 to 30%
<15%
No R&D
tax incentive
For this map to be representative of the Please note that Brazil and Peru have been
different nature of R&D tax incentives added (even if they are not yet members of
(volume- based and incremental tax credits, the OECD organisation) as these countries
super deduction), we took the scenario of a are markets of FI Group.
large company with R&D expenses during
the last 10 years. This map has been designed by the teams of

FI Group to provide the reader with an
Every year the amount of eligible R&D indicative representation of the intensity of
expenses is growing, as such, the R&D tax incentives for large companies at
claimant can apply for incremental R&D international scale.
tax credits and deductions.

Please keep in mind that considering the
The effective return on the R&D expenses is various eligibility criteria of each incentive
shown in the legend as a percentage of post- (size of company, type of activities, financial
tax reduction. situation), only one scenario can be displayed
to provide accurate information. Additional
Further considerations maps will be released in subsequent editions
of the guide.
For this map to be representative of the
different nature of R&D tax incentives
(volume- based and incremental tax credits,
super deduction), we took the scenario of a
large company with R&D expenses during
the last 10 years.
6
01
EUROPE
7
SPAIN
OVERVIEW
Background
Tax credits for R&D and technological
Innovation activities were launched in
1978. However, in the 2000s and 2010s,
several legal changes and improvements
made the tax credits become more
attractive for public and private
companies.

These special rules allowed greater and

FI Group Spain
broader use of the incentive, with one of
+34 900 264 044
them being refunding of unutilised credits

international@fi-group.com
(through the “Ley de Emprendedores”
regime). The R&D state support consists of a
volume-based (25%) and an incremental tax
TYPES OF INCENTIVES credit (42%) for expenses incurred regarding
R&D and a 12% tax credit for technological
innovation activities.
TAX CREDITS/DEDUCTIONS
Additional significant tax credits are available

for eligible expenditure (wages, intangible
fixed assets) when specific conditions are
CASH GRANTS AND LOANS met. In 2020, around 5800 Spanish
companies submitted applications for the
R&D tax credit.
QUALIFIES FOR HORIZON GERD as % of GDP (2020)
EUROPE FUNDING
1.41 %
Corporate income tax rate (2023)

NEXT GENERATION EU FUNDS
Spain’s budget 2022 establishes a minimum
corporate income tax rate of 15% of the tax
base for certain taxpayers effective from FY
REDUCED SOCIAL
SECURITY 2022. The maximum CIT rate remains at 25%.
CONTRIBUTIONS
Corporate income tax return
6 months and 25 days after the end of fiscal
PATENT BOX
year. Most Spanish companies submit their
Corporate tax return on July 25th.
8
MAIN INCENTIVE
Type of incentive Refundable
Volume-based and incremental tax credits. Under the conditions of “Law 27/2014 Article
39.2”. Mandatory pre-approval from the
MICINN (Ministry of Science and Innovation);
Benefit taxpayers can apply the full tax credit with a
Spanish companies can apply for a 25% tax 20% discount.
credit of their qualified R&D expenses
incurred in the tax year. An incremental
credit is available in addition to the volume Eligible activities
based tax credit and equals 42% of all Scientific investigation and research for the
qualified expenses greater than the manufacture of new materials or products,
average of the 2 previous years of such technological improvement of existing
expenses. methods, new software and Technological

Innovation.
An additional 17% credit is granted for wages
paid to qualifying researchers dedicated
exclusively to R&D. Finally, an 8% tax credit is Eligible expenditure
available for investments in tangible and R&D staff wages - Purchase of R&D
intangible fixed assets exclusively allocated to equipment - Materials - Subcontracting
R&D. activities to collaborating public R&D

centers/universities/ bodies and private
For expenses incurred in technological companies - Equipment depreciation which
innovation activities, taxpayers may is proportional to the intensity of use for the
apply for a 12% tax credit. R&D.
Eligible tax liability

Corporate Income Tax (Impuesto sobre
Carry-back
Sociedades).
4 years.
Ceiling
25% of corporate income tax due (50% if the Carry-forward
R&D tax deduction exceeds 10% of the total 18 years.
tax due).
9
Regulatory Body R&D claims are monitored by the Spanish Tax
The MICINN fulfils an important role in Agency. In the event of a tax audit, a full
approving and delivering a ruling (pre- technical justification report is requested
approval) to taxpayers on the R&D nature from the claimant.
of the expenses and investments carried
out.
Location of qualified research

expenditure
This pre-approval is optional and is binding
for the tax administration only as regards the Qualified activities must take place in Spain
scientific nature of the R&D eligible expenses or in a member state of the EU or of the
(R&D or Technological Innovation), not the European Economic Area (EEA).
amount of expenditure.
Claiming procedure Compatibility with other tax

Ex-post. Self-assessment or pre-approval incentives
through he MICINN. The amount of public grant awarded for the

eligible R&D project must be deducted from
Companies looking for maximum security for the total expenses calculated for the R&D
their tax credit can request an R&D tax credit. Both R&D tax credit and
assessment agreement before the beginning reductions on social security contribution
of the project. After receiving the assessment,
can be combined only when applied by
the company can claim the R&D tax credit
eligible SMEs (with the Young Innovative
without any risks in the event of a tax audit.
Start-up label).
KEEP IN MIND
Spain has the only tax credit system of the OECD which includes technical pre-approval of projects,
which is binding in the event of a tax audit and delivered by the Ministry of Science and Innovation.
The delivery of this pre-approval may last between three months and one year.
OTHER INCENTIVES
Reduced social security contributions
The incentive consists of a 40% reduction on social security payments for employees
dedicated full-time to R&D and innovation activities.
Patent Box
The incentive allows a 60% deduction on taxable income of net qualifying income from
licensing or the transfer of qualifying intangible assets.
Grants
National and European grants are available for R&D projects developed in Spain,
depending on the sector, the size of the company and the type and date of the grant
scheme - please get in touch with our local team: international@fi-group.com
10 Back to index
FRANCE
OVERVIEW
Background
For more than 30 years, the French
Government has brought major
improvements to the existing tax
incentives created to attract R&D
activities. As such, these incentives can all
be described as mature, with the
introduction of the R&D tax credit in 1983,
the Innovative Start-up Label in 2004 and
the extension of R&D tax credit to
FI Group France
innovative activities in 2013. Nowadays,
+33 (0) 1 80 18 88 00
the French government’s R&D budget is

estimated at €6.8 billion, and around
22,000 companies apply every year for
the French R&D Tax Credit. The incentive
TYPES OF INCENTIVES consists of a volume based tax credit
(30%) against the corporation tax liability
for R&D expenses. From January 2022, the
TAX CREDITS/DEDUCTIONS French governement announced the
creation of a Collaborative Research tax
credit as well as the extension of the
Innovation tax credit scheme until
CASH GRANTS AND LOANS
31/12/2024.
GERD as % of GDP (2020)

QUALIFIES FOR HORIZON 2.35%
EUROPE FUNDING
SMEs : 15% below €38,120 and beyond 25%.
NEXT GENERATION EU FUNDS Large companies : 25%.


PATENT BOX 3rd of May.

11
MAIN INCENTIVE
Type of incentive Eligible activities
Volume-based tax credit. The definition of qualifying R&D is from the
OECD Frascati Manual. As a common rule,
Benefit experimental research & development,
creation or improvement of a product,
French companies may apply for a 30% tax procedure, process, program or facilities, and
credit of their R&D expenses up to €100M demonstration of originality or substantial
incurred during the tax year. For R&D improvement qualify for the tax credit.
expenditure above €100 million, the tax
credit rate is reduced to 5%. Under certain
Eligible expenditure
conditions, the 30% rate is increased to
R&D staff wages, operating costs (43% of R&D
50% in overseas territories.
staff costs), depreciation costs, investment
For pilots and prototype developments, the
costs (75% of depreciation expenses). The
innovation tax credit is available to SMEs as
costs associated with the application,
they may recover up to 20% of their
maintenance and defense of patents,
expenses related to these fields, up to
normalisation activities, technology
€400K of expenses (which entitles the
monitoring costs (limited to €60K), and finally
claimant to a maximum tax deduction of
the costs of work assigned to research-based
€80K).
public institutions or certified technical
Since 2022, French companies can benefit
centres.
from a tax credit of 40% (50% for SMEs) of
For the collaborative tax credit, eligible
research and development expenses
expenses are those invoiced by a research
incurred, with a Research and Knowledge
and knowledge dissemination organisation
Dissemination Organization (“ORDC”)
in the framework of a research collaboration
within the framework of a collaboration
contract.
contract concluded between 01/01/2022
Regulatory
and 31/12/2025. Not combinable wit the CIR
or direct aid for the same expenses.
The collection tax credit dedicated to the Regulatory Body
textile/clothing-leathersectoris still in The French tax administration does regular
place. and randomised audits of R&D claims and is
sometimes assisted by experts from the
Eligible tax liability Ministry of Higher Education, Research and
Either it’s discount on the Corporate Innovation to assess the scientific level of
Income Tax (Impôt sur les sociétés), either R&D activities.
refund can be “immediate” (Only for SMEs )
Ceiling Carry-back
3 years.
External subcontracting is limited to €10M
and 3 times the internal R&D expenses.
For the Collaborative research tax credit, Carry-forward
eligible expenses are limited to €6M. Up to 3 years.
12
Claiming procedure Compatibility with other grants
Ex-post. No needs for governmental pre- The amount of public grant awarded for the
approval as the companies generally opt eligible R&D project must be deducted from
for the self-assessment claiming process. the total expenses calculated for the R&D
The tax rescript is optional. tax credit. The tax credit on collaborative
expenses is not compatible with the
Location of qualified research research tax credit.
expenditure
R&D activities must take place in the
European Economic Area (EU states
members and Iceland, Liechtenstein and
Norway). Subcontracted companies for R&D
activities must obtain CIR accreditation from
the MESRI (Ministry of Higher Education,
Research and Innovation).
KEEP IN MIND
As it is permanent and claimed through self-assessment, the French R&D Tax Credit is undergoing
ever greater scrutiny by the Tax administration because major attempts at fraud are detected every
year. In case of tax audits, the justification expected by the public institutions (tax administration
and Ministry of Research) is extensive and requires double skilled expertise (as much in science as in
taxation). The claiming procedure, the financial performance of the tax credit and its sustainability
by the public authorities are the main reasons for the success of this tax credit, which contributes to
the attractiveness of the French territory.
OTHER INCENTIVES
Patent Box
The French government introduced a Patent Box regime, effective from January 1, 2019
which allows French companies to benefit from a reduced CIT rate of 10% for R&D
income related to assets from the sale or transfer of:
Patent licenses
Plant variety certificates
Copyrighted software Industrial manufacturing processes
Inventions certified by the INPI (National Institute of Industrial Property).
Grants
National and European grants are available for R&D projects developed in France,
13 Back to index
PORTUGAL
OVERVIEW
Background
FI Group Portugal
innovative activities in 2013. Nowadays,
+351 213 536 037
the French government’s R&D budget is

31/12/2024.

EUROPE FUNDING
21%
3rd of May.
PATENT BOX
14
MAIN INCENTIVE
Type of incentive Eligible expenditure
Volume-based and incremental tax credits. Expenses with personnel directly involved in
R&D tasks (with at least level 4 – according to
Benefit Portuguese Nacional Qualifications
Framework) - Acquisition of tangible fixed
Portuguese companies may apply for a assets – Expenses related to registration and
32.5% tax credit of the amount of eligible maintenance of patents – Participation in the
R&D activities performed during the year. capital of R&D institutions and contributions
In addition to this volume-based tax credit, to investment funds – Operating expenses up
an incremental tax credit is also available, to 55% of personnel expenses – R&D audits
allowing companies to reduce their tax expenditures (in accordance with NP4457) -
burden of 50% of the excess of eligible Expenses related to contracting R&D
expenses in comparison with the average activities with entities whose suitability in
of the prior two years. In the event of an terms of R&D is recognised by ANI - Expenses
initial claim, all the eligible expenses will be related to the participation of directors and
deducted at an increased rate of 82.5%. For managers in the management of R&D
SMEs which do not complete two fiscal institutions - Expenses for demonstration
years and therefore cannot benefit from activities arising from supported R&D
the incremental rate, an additional rate of projects and that have been previously
15% is available to increase the volume- reported to ANI.
based tax credit, allowing a 47.5% tax credit
on R&D expenses performed during the Regulatory Body
year.
The Portuguese Regulatory body in charge
of the SIFIDE application is called ANI
(Agência Nacional de Inovação) and is
Corporate Income Tax (Imposto sobre o responsible for determining the eligibility of
Rendimento de Pessoas Coletivas). claimant’s projects.
Ceiling
The incremental tax credit is limited to
€1.5M. Carry-back
None
Refundable
No.
Carry-forward
Eligible activities Up to 8 years.
The eligible activities are defined by the

OECD Frascati Manual and include Basic
and Applied research as well as
experimental development.
15
expenditure
KEEP IN MIND
To obtain the tax credit, the R&D claim must be granted by ANI which gives a stamp of approval to
projects that are within the R&D scope. In this sense, a technical and financial report are required to
substantiate the R&D claim.
The evaluation process is performed by experts who evaluate the degree of novelty and proofs of
technological breakthrough within the submitted R&D projects. This is the most demanding criterion
for the approval of the Portuguese R&D tax credit.
OTHER INCENTIVES
Patent Box
This recent programme allows companies to qualify for a 50% reduction on the taxable
profit for revenues generated by IP (patents, industrial drawings and models)
developed through R&D on or after 1 July 2016. The revenues issued from the
development of trademarks, software, copyrights, and know-how are not eligible for
the reduction.
Grants
National and European grants are available for R&D projects developed in Portugal,
16 Back to index
UNITED
KINGDOM
OVERVIEW
Background
Initially introduced in 2000 for SMEs, the
R&D tax scheme is the main source of
state support in the UK for innovative
companies. The government extended its
scope in 2002 to large companies so they
FI Group UK can also benefit from it. Legal changes
+44 20 3880 2142
came in later to strengthen the tax relief
international@fi-group.com through the Research and Development
Expenditure Credit (RDEC) and since
then, both incentives co-exist to provide
SMEs and large companies R&D tax
TYPES OF INCENTIVES benefits according to the size of their
business. SMEs can apply for a tax credit
of 33.35% of the current year’s expenses,
TAX CREDITS/DEDUCTIONS
while large companies can claim a 13%
above the line tax credit. During the 2019-
2020 tax year in the UK, there was an
estimated number of R&D tax credit
claims of £85,900 for this period, which
corres- ponds to £7.4 billion of R&D tax
relief support claimed during that period.
QUALIFIES FOR HORIZON
EUROPE FUNDING

1.74%
PATENT BOX
19% (raising to 25% 1st April 2023)

9 months after year end for SME and 12
months for Large companies.
17
MAIN INCENTIVE
Type of incentive Eligible tax liability
Volume-based tax credits Corporate Income Tax (Corporation Tax).
Benefit
Eligible activities
British profit-making SMEs can claim an
enhanced deduction of 130% of eligible Creation or improvement of a product,
costs, equivalent to net tax credit ranging procedure, process, programme or
from 18.6% to 33.33% depending on the equipment, demonstrating originality or
profit and loss position of the company. substantial improvement. These
The criteria for qualification as a SME developments must seek to achieve
follows the EU recommendation, but the scientific or technological advancements,
criteria is doubled. and involve the resolution of scientific or
Until March 2020, the RDEC (Research & technological uncertainties.
Development Expenditure Credit) allowed
large companies to claim a 12% gross tax Eligibible expenditure
credit from eligible R&D expenditure. Staffing costs / Operating costs (software
From April 2020, the rate of the tax credit and consumables) / 65% of Subcontracted
has been increased to 13%. Considered as activities / 65% of Externally Provided
an income ‘’above the line”, it is taxable Workers (EPWs).
at the corporation tax rate of 19%, which
results in a net benefit of 10,53%.
SMEs Large Companies
R&D Expenditure Credit is a standalone

credit that discharges corporation tax
65% of subcontracted R&D costs can be
Ceiling liability for profit making companies, or a
included under the tax relief schemes.
cash payment /reduction of other
tax/duties due for loss making companies.
Reduces tax liability and creates a refund

of tax paid for profit making claimants.
For loss making claimants, a refund of Yes subject to a series
Refundable
14.5% of the enhanced non-refundable of steps setting off liabilities.
losses, resulting in a net benefit of 33.33%
of eligible R&D expenditure.
Treated as normal trading losses carried It does not create losses as back to the previous
Carry-back
year. It is a standalone credit.
The taxed element, currently 19%, is

Treated as normal trading losses to be
Carry-forward carried forward to set off against the next
utilised in subsequent years.
year or repaid for loss making claimants.
18
Regulatory Body Location of qualified research
The HMRC (Her Majesty’s Revenue & expenditure
Customs) is a non-ministerial department of Previously, there has been no specific
the UK Government responsible for the requirement for the ownership of the IP and
attribution of R&D tax credits. R&D activities could have taken place
anywhere in the world. This will remain the
Claiming procedure case until 1 April 2023, however, for claims
Claims are made through a self-assessment made after this period new rules around the
method in the corporate tax return. location in which the R&D is taking place
Technical and financial documentations to will come into effect.
support the claim are required to support the
claim and are sent with the tax Compatibility with other tax
computations.
incentives
The amount of expenditure incurred on R&D
projects that have been grant-funded can
still be claimed under the RDEC scheme.
KEEP IN MIND
Whether you are considered an SME or a Large Company, one should consider the size of the
company at a global level and not only in the UK. HMRC will typically process claims within 28 days
and therefore a cash credit should be received within this timeframe.
The current rates of relief are dropping for expenditure incurred on of after 1st April 2023. the RDEC
scheme is increasing from 13% to 20% whilst the SME scheme is reducing to an equivalent of 21% for
profitable companies and 18.6% for loss making companies who take the cash credit. Companies
who have 40% R&D intensity vs their OPEX will retain a cash credit of 27%.
Exclusion of costs not incurred in the UK from 1 April 2024: overseas EPWs will have to have payroll
administered in the UK to be eligible subcontractors must perform their tasks in the UK to be
eligible.
OTHER INCENTIVES
Patent Box
For profits arising from patented inventions, the Patent Box scheme allows these
profits to be taxed at a lower rate than profits arising elsewhere. The profits attributable
under the Patent Box scheme are taxed at 10% instead of the 20% main rate.
Grants
National and European grants are available for R&D projects developed in the UK
19 Back to index
BELGIUM
OVERVIEW
Background
FI Group Belgium innovative activities in 2013. Nowadays,
international@fi-group.com the French government’s R&D budget is
31/12/2024.

EUROPE FUNDING
REDUCED SOCIAL 21%
SECURITY
CONTRIBUTIONS Corporate income tax return
3rd of May.
PATENT BOX
20
MAIN INCENTIVE
Volume-based and incremental tax credits. Expenses with personnel directly involved in
R&D tasks (with at least level 4 – according to
Benefit Portuguese Nacional Qualifications
Framework) - Acquisition of tangible fixed
Portuguese companies may apply for a assets – Expenses related to registration and
32.5% tax credit of the amount of eligible maintenance of patents – Participation in the
R&D activities performed during the year. capital of R&D institutions and contributions
In addition to this volume-based tax credit, to investment funds – Operating expenses up
an incremental tax credit is also available, to 55% of personnel expenses – R&D audits
allowing companies to reduce their tax expenditures (in accordance with NP4457) -
burden of 50% of the excess of eligible Expenses related to contracting R&D
expenses in comparison with the average activities with entities whose suitability in
of the prior two years. In the event of an terms of R&D is recognised by ANI - Expenses
initial claim, all the eligible expenses will be related to the participation of directors and
deducted at an increased rate of 82.5%. For managers in the management of R&D
SMEs which do not complete two fiscal institutions - Expenses for demonstration
years and therefore cannot benefit from activities arising from supported R&D
the incremental rate, an additional rate of projects and that have been previously
15% is available to increase the volume- reported to ANI.
based tax credit, allowing a 47.5% tax credit
on R&D expenses performed during the Regulatory Body
year.
The Portuguese Regulatory body in charge
of the SIFIDE application is called ANI
(Agência Nacional de Inovação) and is
Corporate Income Tax (Imposto sobre o responsible for determining the eligibility of
Rendimento de Pessoas Coletivas). claimant’s projects.
Ceiling
The incremental tax credit is limited to
€1.5M. Carry-back
5 years for the PWT. No
carry-back for the RIDTC.
Refundable
No. Carry-forward
PWT: None – RIDTC / IB:
Unlimited carry-forward.
Eligible activities
The eligible activities are defined by the
OECD Frascati Manual and include Basic
and Applied research as well as
experimental development.
21
expenditure
KEEP IN MIND
To obtain the tax credit, the R&D claim must be granted by ANI which gives a stamp of approval to
projects that are within the R&D scope. In this sense, a technical and financial report are required to
substantiate the R&D claim.
The evaluation process is performed by experts who evaluate the degree of novelty and proofs of
technological breakthrough within the submitted R&D projects. This is the most demanding criterion
for the approval of the Portuguese R&D tax credit.
OTHER INCENTIVES
Patent Box
This recent programme allows companies to qualify for a 50% reduction on the taxable
profit for revenues generated by IP (patents, industrial drawings and models)
developed through R&D on or after 1 July 2016. The revenues issued from the
development of trademarks, software, copyrights, and know-how are not eligible for
the reduction.
Grants
National and European grants are available for R&D projects developed in Belgium,
22 Back to index
ITALY
OVERVIEW
Background
With the new Transizione 4.0 plan, Italy
has decided to relaunch, stabilize (until at
least 2031) and increase the incentives for
companies that invests in R&D,
Innovation and Design toward a more
sustainable and digital productive
process. The tax credit‘s intensity has
been increased to boost the investments
in R&D by firms operating in the southern
FI Group Italy
regions of Italy. The intensity will range
+39 800 810 001
depending on the type of activities

developed by Italian taxpayers, whether
they are carried out for R&D,
Technological Innovation related to
TYPES OF INCENTIVES Industry 4.0, Sustainable Development or
Design. Besides, Italy is one of the greater
beneficiaries from the Recovery Plan
TAX CREDITS/DEDUCTIONS funds. This will open further promising
opportunities especially in 2021 and 2022.
CASH GRANTS AND LOANS GERD as % of GDP (2021)

1.54%

EUROPE FUNDING 24%

NEXT GENERATION EU FUNDS 30th of November
PATENT BOX
23
MAIN INCENTIVE
Type of incentive Ceiling
Volume-based tax credit. The maximum amount which can be
claimed by companies in 2023 fiscal year will
Benefit be:
·Up to €5M for R&D tax credit
For fiscal year 2023, the new tax credit‘s
·Up to €4M for Technological Innovation
intensity will range depending on the type
related to Industry 4.0 and Sustainable
of activities: 10% tax credit for Research and
Development tax credits
Development, Technological Innovation
·Up to 2 M€ for Design and Technological
related to Industry 4.0 and Sustainable
Innovation
Development and Technological
Innovation and Design. Refundable
Besides, for companies operating in
No.
southern Italy (Abruzzo, Basilicata, Calabria,
Campania, Molise, Apulia, Sardinia and Eligible activities
Sicily) the rate of the tax credit for research
The activities are not limited to a particular
and development expenses will be as
field or industry. The eligible activities are
follows:
defined by the OECD Frascati and Oslo
·25% tax credit for large companies
Manuals and include basic and applied
employing at least 250 people, with an
research as well as experimental
annual turnover of at least €50M or a
development.
balance sheet total of at least €43M.
·35% tax credit for medium-sized
companies employing at least 50 people
and with an annual turnover of at least €10 The eligibility applies for the three tax
million. credits: Hiring of cost of employees -
·45% tax credit for small businesses research agreements with universities,
employing less than 50 people and whose research institutes, enterprises, innovative
annual turnover or annual balance sheet startups and SMEs - depreciation on
total does not exceed €10 million. laboratory equipment and instrumentation
- technical know-how and industrial
Eligible tax liability property rights.
The tax credits can be used to offset a wide

range of taxes and contributions (Corporate Carry-back
Income Tax, regional production tax, 5 years, under specific
withholding tax liabilities, VAT) even if the conditions.
company reports losses.
Carry-forward
3 years.
24
Regulatory Body Tax credits are claimed through tax returns
The Ministry of Economic Development along with the F24 form.
(Ministero dello Sviluppo Economico)
oversees the technical aspects, while the
Italian Tax Administration (Agenzia Entrate)
expenditure
oversees the fiscal ones. The R&D activities commissioned to an
Italian company by a foreign entity are no
Claiming procedure
longer eligible for R&D Tax Credit after FY
Ex-post. R&D tax credits must be supported
2019.
by certifying the qualifying expenses to
calculate the benefit. Compatibility with other grants
Furthermore, from FY 2021 technical reports If not specified differently, public grants are
justifying their activities must be certified
compatible with R&D Tax Credit, with the
through a sworn appraisal (perizia
limit of no more than 100% of the expenses.
asseverata).
KEEP IN MIND
As a recent incentive, the Italian tax credit is experiencing significant changes since 2015. So, its
changing nature, which is due to new tax regulations and finance bills, should be taken in account by
claimants.
The Frascati Manual has been recently offically recognised as the benchmark for identyfing R&D
activites. FI Group has been the first to translate it in Italian and makes it available for its clients
and partners.
OTHER INCENTIVES
Patent Box
TThe new patent box regime enables a tax credit on the Research and Development
costs beared for intangibles, used directly or indirectly by the companies. The
percentage is 110% of the costs.
Grants
National and European grants are available for R&D projects developed in Italy,
25 Back to index
GERMANY
OVERVIEW
Background
Germany was one of the only European
countries without an R&D tax credit regime.
However, in November 2019, the German
Federal Council (Bundesrat) approved the
Act on the Tax Promotion of Research and
Development (Forschungszulagengesetz)
which introduced the first R&D tax credit on
January 1, 2020. This followed months of work
on the Bill by Members of the German
FI Group Germany
Parliament to ensure it met the requirements
international@fi-group.com to make it a viable system. The R&D relief
consists of a 25% volume-based tax credit for
expenses incurred on Research &
Development. There is a ceiling on the
TYPES OF INCENTIVES amount of eligible expenditure: €2M per
year/corporation which means a maximum
€500,000 of tax credit. From 30/06/2020, the
TAX CREDITS/DEDUCTIONS ceiling is doubled and the maximum amount
of tax credit is raised to €1M. All German
companies subject to tax, regardless of size or
the type of activity they carry out are able to
claim the tax credit.

EUROPE FUNDING 3.14%

Corporate income tax/solidarity surcharge:
NEXT GENERATION EU FUNDS 15.825%; Trade tax: From 8.75% to 20.3%,
depending upon the location of the business
establishment.

31 of July (if the taxpayer instructs a
professional tax adviser, the deadline is
extended to the end of February of the
following year).
26
MAIN INCENTIVE
Type of incentive Further information is pending from the Tax
administration about the timeline of the
Volume-based tax credit.
cashback.
Benefit
Eligible activities
For projects started after January 1, 2020,
Fundamental research, industrial research,
German companies can apply for a 25% tax
and experimental development within the
credit of their qualified R&D expenditure
meaning of EU regulations.
incurred in the tax year. The R&D tax credit
ceiling is to be considered per year and per
These activities must have started after 1
group as follows: • from 01/01/2020 to
January 2020. Activities aiming at market
30/06/2020: €2M of eligible expenditure
development or to improve production
(0.5M€ of tax credit) • from 01/07/2020 to
systems are not eligible.
30/06/2026: €4M of eligible expenditure
(1M€ of tax credit).
Eligible tax liability Wages that are subject to German wage tax
Corporate Income Tax (Einkommenssteuer). and expenses for securing the employees’
future (e.g. social contributions).
Ceiling
However, wages are eligible only to the
25% of eligible R&D expenditure. The total extent the employees are entrusted with
amount of research allowances and other research and development activities in
state support granted for an R&D project eligible R&D projects.
may not exceed €15M per company (on an
individual basis) and per R&D project. For contract research, the assessment base
includes 60% of the expenditure paid by the
Refundable taxpayer.
Loss-making taxpayers will receive the
cashback of the tax credit.
Carry-back
Limited
Carry-forward
None
27
Regulatory Body The tax credit application must be
The R&D certification of the submitted electronically to the local tax
Bescheinigungsstelle Forschungszulage office. This application must be supported
(BSFZ) is coordinated by the VDI by the obtained certificate and expenses.
Technologiezentrum GmbH (Technology
center and innovation service provider), AIF Location of qualified research
Projekt GmbH (a management agency for expenditure
Germany’s federal SME-oriented funding Qualified activities must take place in
programmes) and the Deutsches Zentrum
Germany for staff costs or in a member state
für Luft und Raumfahrt (German Aerospace
of the EU or European Economic Area (EEA)
Center).
for subcontracting costs.

Ex-post. R&D tax credits must be supported Any expenses that has already received any
by certifying the qualifying expenses to public fund cannot be included into the
calculate the benefit.
calculation of the R&D tax credit.
Furthermore, from FY 2021 technical reports
justifying their activities must be certified
through a sworn appraisal (perizia
asseverata).
KEEP IN MIND
Claimants must know that only R&D projects starting after January 1, 2020 are eligible and in case of
subcontracting activities, only the contracting party will be able to claim the R&D tax credit.
Besides, we strongly advise our clients to collect supporting documentation of the R&D expenditure
incurred throughout the year. Being implemented in 2020 for the first time, the German tax credit
may be object to future tax changes to clarify potential grey areas of the law.
OTHER INCENTIVES
Grants
Public national Grants are available for:
Research & Development & Innovation.
Investment (including energy saving, sustainable development).
Next Generation EU Funds.
Please get in touch with our local team: international@fi-group.com
28 Back to index
IRELAND Operational Hub
OVERVIEW
Background
Since the introduction of the R&D tax credit
in 2004 (designed to incentivise incremental
R&D expenditure) the importance of R&D tax
support has significantly increased in Ireland.
At first incremental, and then hybrid with the

inclusion of a volume-based tax relief since
the Finance Act 2014, Ireland provides an
entirely volume based R&D tax credit.
FI Group UK
+44 20 3880 2142
In 2019, SMEs accounted for 89% of R&D tax

relief recipients, while the share of R&D tax
support accounted for by SMEs was around
28%. On the other hand, large companies
TYPES OF INCENTIVES accounted for 11% of R&D tax relief recipients
in 2019, while the share of R&D tax support
accounted for by large companies was about
TAX CREDITS/DEDUCTIONS 71%.
In 2018, more than 1,300 Irish companies

claimed the R&D tax credit, implying a cost of
€335 million for the Exchequer.

EUROPE FUNDING
12.5%
9 months after the end of the accounting
period.
PATENT BOX
29
MAIN INCENTIVE
Volume-based tax credit. Where a company has offset the credit
against the Corporation Tax of the current
Benefit and preceding accounting periods and an
excess amount remains, the company may
The volume-based tax credit is calculated
request to have the amount of that excess
as 25% of qualifying expenditure.
paid to it by Revenue in three instalments
over a period of 33 months.
Following exponential growth within the
gaming sector over the past 10 years,
Eligible activities
Ireland first Digital Gaming Tax Credit
(“DGTC”) was announced with the 2021 Qualifying activities must be basic research,
budget and expected to launch in 2022. applied research or experimental
development.In addition, they must seek to
In order to support growth within the achieve scientific or technological
Digital Gaming sector in Ireland, a advancement, and involve the resolution of
refundable DGTC of 32% will be available to scientific or technological uncertainty.
companies for expenditure incurred on the
design, production, and testing of a game.
Staffing costs / Operating costs and
A limit of €25M of eligible expenditure per consumable / Plants and machinery /
project will apply, along with a minimum Subcontracted expenditure to commercial
€100K of eligible expenditure being third parties and universities limited to the
required to make a claim. greater of €100K or 15%.
European State aid approval is required

and therefore the relief is subjected to a
commencement order. Carry-back
Limited
Corporate Income Tax (“Corporation Tax”). Carry-forward
None
Ceiling
None.
30
Revenue (Irish Tax Customs) oversees the expenditure
administration and delivery of R&D tax credits R&D activities must occur within Ireland or
to eligible companies. Technical experts may the EU.
inquire as to the eligibility of the expenditure,
especially during the first year’s claim. Compatibility with other grants
Any expenditure which is funded directly or
Claiming procedure
indirectly by any grant (from the State or the
All claims for R&D tax credit are to be made
EU) will not qualify for the R&D tax relief.
using Form CT1 on the Revenue Online
service, and must be submitted within 12
months from the end of the accounting
period in which the expenditure was
incurred.
KEEP IN MIND
Companies claiming the R&D tax credit are not required to hold the intellectual property rights
resulting from the R&D work. Proper records must be maintained by companies claiming R&D credit.
OTHER INCENTIVES
Patent Box
Known as “Knowledge Development Box”, this relief applies to income from qualifying
patents, computer programmes and, for smaller companies, certain other certified
intellectual property (IP). The KDB scheme allows a deduction equal to 50% of
qualifying profits, meaning that these may be taxed at 6.25%.
Grants
National and European grants are available for R&D projects developed in Ireland
31 Back to index
SWITZERLAND Operational Hub
OVERVIEW
Background
On May 2019, Swiss people adopted the
Federal Act on Tax Reform (Réforme fiscale et
financement de l’AVS) through a public
referendum which introduced a new
international accepted tax system as it
abolishes the preferential tax regimes of the
cantons (Swiss regions). Within the tax
reform package was included a R&D super-
deduction which application is optional to
FI Group Switzerland each canton.
The tax reform also introduced a Patent Box
which consists in a reduction of up to 90% on
income derived from domestic, foreign
TYPES OF INCENTIVES patents and comparable rights. The reform
brings an unprecedented change to the
Swiss corporate tax landscape as nearly all
TAX CREDITS/DEDUCTIONS companies are affected by the most
significant overhaul of the tax system in years.
NEXT GENERATION EU FUNDS GERD as % of GDP (2022)

2.57%

The federal Swiss corporate tax rate is a flat
8.5%, but cantonal tax rates can vary
considerably. The maximum corporate tax
rate including all federal, cantonal and
communal taxes is between 11.9% and 21.6%.

The due date varies from canton to canton.
It usually ranges from six to nine months
after the end of the business year.
32
MAIN INCENTIVE
Type of incentive deduction may not exceed 70% of the
taxable profit (before loss compensation).
Volume-based tax deduction and Patent Box.
The threshold may vary according to each
Benefit canton.
R&D super deduction: Swiss companies

Eligible activities
can apply for an additional deduction of up
to 50% from their own reference R&D costs R&D super deduction: Basic research, applied
incurred in Switzerland or R&D costs research as well as Science based innovation.
commissioned to third parties for their Patent Box: The patents defined as such by
R&D activities conducted in Switzerland the Federal Patents Act of 25 June 1954 and
during the year. No deduction is allowed to equivalent foreign ones are eligible. Rights
the agent if the principal is eligible for a comparable to patents include protected
deduction. topographies, protected plant varieties and
The calculation of the reference costs data protected under the Therapeutic
includes the own R&D staff costs which are Products Act, as well as foreign rights
increased by 35% (but up to the total of the equivalent to these. Trademarks, Designs,
taxpayer’s expenses) and the R&D costs Copyrights and Software are excluded.
mandated to third parties are deducted up Nevertheless, if a piece of software is part of
to 80%. Cantons are free to introduce this an invention, it may be patented as a
measure in the cantonal legislation and computer-implemented invention.
decide on the rate of the additional
deduction. Eligible expenditure
Patent Box: All swiss companies involved in R&D super deduction: R&D staff costs
developing patents may apply for their CIT (salaries and social insurance) -
on income from qualifying patents to be Subcontracting activities billed to third
treated separately. The proportion of parties located in Switzerland. Patent Box:
income from patents and similar rights to Income that arises from patents and
the extent it is based on qualifying R&D comparable rights (licenses, sale of patents
expenses in Switzerland is exempt from CIT or comparable rights) as well as income that
up to a maximum of 90% (depending on arises from patents and comparable rights
the cantonal implementation). The protected abroad but with R&D conducted
introduction of the patent box is in Switzerland. The Nexus approach is
mandatory for every canton, which ones considered and in accordance with OECD
can foresee a smaller reduction. guidelines.
Refundable
No. Carry-back
Limited
Ceiling
A company’s maximum cantonal and Carry-forward
municipal income tax reduction resulting
None
from the patent box and the R&D super
33
Regulatory Body the accounting treatment of operations, etc.
The Tax Administration of each canton The claimant must also submit a legal and
oversees the ruling of the R&D Super tax analysis in support of the application
deduction and the Patent Box. This process is that is defended.
not mandatory but is strongly recommended
for the claimants to apply both tax incentives Location of qualified research
in compliance with the new tax regulations. expenditure
Claiming procedure Qualified activities must take place
exclusively in Switzerland for R&D tax
Ex-post. The ruling request is to be addressed
to the cantonal tax administration at any deduction purpose. Income that arises from
time during the year. The taxpayer must patents and comparable rights protected
provide accurate and complete information abroad but with R&D conducted in
to enable the tax Administration to make Switzerland is eligible for the Patent Box.
valid decisions. A report must be delivered in
which several facts must be detailed such as Compatibility with other grants
the description of the project, a list of The amount of public grant awarded for the
personnel dedicated to R&D with their
eligible R&D project must be excluded from
function and time spent on the project the
the total expenses calculated for the R&D
location of R&D expenditure,
tax deduction.
KEEP IN MIND
Because of the disparities in the application of these measures in the cantonal laws, it is important,
when a company has a presence in several cantons, that it also ensures compliance with the rules in
force on the intercantonal allocation of profits and capital.
Claimants should also keep in mind that the friendly and helpful relationship of the regional tax
administration towards private companies makes the tax ruling an effective and time saving
process.
34 Back to index
POLAND Partner
OVERVIEW
Background
Until 2016, Poland offered an accelerated
depreciation of machinery and equipment
and buildings used in R&D. A marked
increased in implied R&D tax subsidy rates is
noticeable in 2016 when an enhanced,
volume-based R&D tax allowance was
introduced. The Polish government’s will to
support local companies saw in the following
years the allowance rate increases gradually
FI Group Poland from 30% to 100% in 2018. As of January 2022,
international@fi-group.com the Polish government introduced the Polish
Deal, a package of incentives to reboot the
economy after the epidemic, intended to
introduce new, and tweak existing, tax breaks
TYPES OF INCENTIVES to support investment and innovation.
As such, the Polish Deal sets out many
significant changes for companies as the
TAX CREDITS/DEDUCTIONS existing R&D tax relief rises to 200% for costs
related to salaries for R&D employees,
Prototype and Robotics tax reliefs are
introduced to allow taxpayers to benefit from
a tax deduction on eligible costs and finally, a
relief for innovative employees is available for
entities holding the R&D relief not deducted
QUALIFIES FOR HORIZON in an earlier year that will be entitled to
EUROPE FUNDING deduct it from the advance payments for
income tax deducted monthly from the
salaries of selected employees. In Poland,
NEXT GENERATION EU FUNDS R&D tax incentives accounted for 2% of total
government support for in 2016 - the first year
in which the tax allowance was available and
14% in 2019.
PATENT BOX
1.44%

19% & 9% for SMEs (annual sales revenues do
not exceed €2M).

3 months after the end of fiscal year.
35
MAIN INCENTIVE
Volume-based tax deductions. Ceiling R&D tax relief: The value of the
deduction may not exceed the amount of
Benefit income in a given tax year. Robotization tax
relief: the value of the deduction may not
R&D tax relief: From January 1, 2022, all
exceed the amount of income in a given tax
companies based in Poland can claim a
year. Prototype tax relief: the amount of the
200% of eligible R&D expenditure related
deduction cannot exceed 10% of the income
to salaries of R&D staff as a reduction of
earned from sources other than capital
their tax base from current year’s
gains in a tax year.
expenditure. Same benefit applies for
companies entitled to a R&D centre status,
Refundable
however, the deduction of 200% can be
applied for all types of eligible costs. Polish R&D tax relief: Startups can benefit from
companies claiming benefits under the “cash back”. If the company is loss making in
Polish Investment Zone will not be eligible the year it started operating, the incentive
for the R&D tax deduction. Prototype Tax can be offered in cash.
Relief: allows a deduction from the tax base
of 30% of the sum of the costs of the trial
Eligible activities
production of a new product and the R&D Tax relief is available for companies
launch of a new product. Robotization Tax carrying out activities falling withing the
Relief: allows for an additional deduction scope of R&D works that are defined in the
(50%) from income of robotization costs. tax law. According to statutory definition, the
Robotization relief is available only for tax research and development activity (R&D) is a
costs incurred in the years 2022 through creative activity involving research or
2026. Innovative Employees Tax Relief: If a development, undertaken in a systematic
taxpayer suffered a loss or earned income manner to increase knowledge resources
that does not allow for full deduction of the and to use knowledge resources to create
R&D tax relief, the company can reduce the new applications. Prototypes tax relief is
monthly Personal Income Tax advance available for companies which run a trial
payments remitted as an employer by 19% production of new products and markets a
of the value of the R&D relief not claimed in new product. Robotization tax relief is
whole. This provision will apply to advance available for production entities which are
tax payments withheld from salaries of investing in automation of their plants.
employees whose involvement in R&D
projects accounts for at least 50% of their
Carry-back
monthly working time. Limited

Corporate Income Tax & Personal Income Tax. Carry-forward
None
36
Regulatory Body Regulatory Body
R&D Tax relief: Salaries (wages, allowances, he incentives are administered by the
bonuses, overtime, leave, superannuation, Ministry of Finance.
payroll tax and workers insurance) - Civil law
agreements (contract of mandate, contract Claiming procedure
work) - Materials & Supplies (all materials and Ex-post. Self-assessment program. To benefit
supplies used for R&D including low cost from the tax relief, each entity needs to
laboratory equipment) - Co-operation with perform R&D works and prepare a record of
Scientific Units (costs of analysis, research, the eligible costs incurred in relation to R&D
development and comparable services) - works in a given year. There is no specific
Renting of research equipment - Acquiring separate reporting apart from having internal
legal protection for technical knowledge (all justification and documentation supporting
costs made to acquire patent and other classification of certain costs as R&D
similar legal protection in Poland and the EU) expenditures. A company claiming R&D tax
- Amortization (intangible assets) and relief must submit an appendix (CIT BR / PIT
depreciation (fixed assets) used in R&D, BR) to its annual tax return. Tax authorities
excluding houses, buildings and cars. may review the deduction during a regular
Robotization tax relief: Costs of purchasing tax audit. In Poland, the statutory limitation
new industrial robots (and related machines period is five years.
and devices), software used for the correct
operation of robots, as well as training costs Location of qualified research
for employees on how to use them. Prototype expenditure
Tax Relief: purchase price or production cost Eligible R&D activities must take place in
of new fixed assets necessary to start trial
Poland.
production of a new product, purchase costs
of materials and raw materials purchased Compatibility with other grants
solely for the purpose of trial production of a
The amount of public grant awarded for
new product, costs of improvement incurred
to adapt the fixed asset to launch trial
production of a new product, research, the total expenses calculated for the R&D
expertise and certification costs, product life tax deduction.
cycle studies, environmental technology
verification system.
KEEP IN MIND
The obligation to maintain accounting records for tax purposes is indicated in Article 9 of the CIT Act
or Article 24a of the PIT Act. Taxpayers are obliged to keep accounting records, in accordance with
separate regulations, in a manner ensuring the calculation of the amount of income (loss), tax base
and the amount of tax due for the tax year, as well as to include in the records of tangible and
intangible assets information necessary to calculate the amount of depreciation. Taxpayers
conducting R&D activity who claim for R&D tax deduction are obliged to separate in their records the
costs of research and development activity, so it allows to separate the qualified costs incurred.
37 Back to index
02
AMERICA
38
CANADA
OVERVIEW
Background
Historically committed to R&D activities, the
Canadian government introduced its first
R&D incentive in 1944 through the “Income
tax Act”.
The basic structure of the current system of

federal income tax incentives for SR&ED
(Scientific Research and Experimental
Development) was put in place between 1983
FI Group Canada
and 1985.
+ 1 514 507 8320
Since then, numerous changes have affected
the incentive but it has never been
suppressed and should remain effective for
TYPES OF INCENTIVES the upcoming years.
In 2017, the SR&ED programme provided

TAX CREDITS/DEDUCTIONS more than €1.8 billion in R&D tax credits in
support for research and innovation. Each
year, more than 21,000 companies in Canada
claim the R&D tax credit.
1.7%
EUROPE FUNDING Corporate income tax rate (2023)
The Canadian general corporate tax rate is set
at 38%, however, after federal tax abatement,
PATENT BOX the rate is 28%.

6 months after the end of the tax year for all
companies. Amended tax returns possible
up to 18 months after fiscal year end.
39
MAIN INCENTIVE
Volume-based tax credit. If related to SR&ED, the following category of
expenditure is eligible if performed during
Benefit the year of the claim: Salary and wages –
materials consumed or transformed – SR&ED
Companies incurring research expenses
sub-contracts – Overhead costs – Third-
can claim the SR&ED tax credit and use it
parties payment.
to reduce the payable income tax. The
amount of tax credit will range between
Regulatory Body
15% and 35% of the qualified SR&ED
expenditure. The Canadian Revenue Agency (CRA)
oversees the incentive administration and
Generally, a distinction is made from validation. Also administering the eligibility
Canadian-controlled private corporations assessment of the projects and claimed
(CCPCs) that qualify for a refundable tax expenditures, the CRA can decide to carry
credit at the enhanced rate of 35% against further examinations if the claim file is
the first CAD 3 million (if over this amount, incomplete.
the tax credit rate is 15% and non-
refundable). In addition to this federal tax
Claiming procedure
credit, provincial R&D tax incentives may Ex-post. Even if the claiming process is
apply and be combined with the federal through self-assessment, technical
program. description of each project is mandatory
when filing the prescribed tax forms.
Corporate Income Tax (Impôt des sociétés / The SR&ED tax credit application can be filed
Corporation Tax). up to 18 months after the fiscal year end.
Ceiling
None.
Carry-back
Refundable 3 years
Yes, under conditions and for CCPCs only.
Eligible activities Carry-forward

20 years
The scope is broad enough and no particular
industry or size is targeted. As the definition
of SR&ED is consistent with the OECD
definitions, the eligible activities include:
Basic Research – Applied Research –
Experimental Development.
40
Location of qualified research Compatibility with other grants
expenditure The amount of governmental and non-
The R&D activities must be performed in governmental grants awarded for the eligible
Canada. If it’s performed abroad, the SR&ED R&D project must be deducted from the total
work must be undertaken by the employees pool of expenditures included in the SR&ED
of the claimant and must form part of the tax credit claim.
SR&ED work carried in Canada. Limited to
10% of the total of the salaries or wages for
SR&ED conducted in Canada.
KEEP IN MIND
Although the corporate tax returns must be filed within 6 months, the SR&ED tax credit can be filed
up to 18 months after the fiscal year end.
The CRA assesses the eligibility of each project using a 2-step methodology to determine whether
they meet the definition of SR&ED. The CRA simplified the technical part as the 5 questions no longer
exist. The definition now describes why and how SR&ED is conducted, which are two key
requirements that must both be met for work to be eligible as SR&ED.
OTHER INCENTIVES
Provincial credits for Research & Development activities
Every Province can offer a specific extra credit for the R&D activities developed in the
province. For example, Ontario offers an extra credit between 3,5% and 8% of the R&D
values expended in Ontario, achieving even 20% if the expenditures incurred in Ontario
happen under an eligible contract with an eligible research institute.
Grants
National and European grants are available for R&D projects developed in Canada
scheme - please get in touch with our local t depending on the sector, the size of the
company and the type and date of the grant scheme - please get in touch with our local
team: international@fi-group.com
41 Back to index
USA
OVERVIEW
Background
Initially temporary, the US R&D tax credit was
introduced in 1981, and since then it has
always been extended. The incentive became
permanent in 2015 as the Congress
proposition was accepted (PATH Act).
Originally, the incentive was made of the
Traditional R&D Tax Credit.
As it was particularly difficult to use for

FI Group USA
newborn companies (excluded as they don’t
+1 (630) 258-4981
have a base amount), the Alternative

Simplified credit was introduced in 2008.
Nowadays, most of the companies are
applying to the Alternative Simplified Credit,
TYPES OF INCENTIVES even if it has a smaller rate as the base
amount applies for the three prior years.
TAX CREDITS/DEDUCTIONS The US tax credit is considered generous as

each state can also offer its proper R&D tax
credit, which is normally combined with the
federal one.

3.5%

21%. A local tax rate is also effective, ranging
from 0% to 12% depending on the state.

For C-Corps: 15th day of the 4th month after
the end of the company’s fiscal year. For S-
Corps and Partnerships: 15th day of the 3rd
month after the end of the company’s fiscal
year.
42
MAIN INCENTIVE
Incremental R&D tax credit. No, but local tax credits can offer a refund
under certain conditions.
Benefit
U.S. Companies can benefit from an Eligible activities
incremental R&D tax credit, made up of To be eligible, the company must satisfy the
two different incentives known as the four-part test ascribed by the IRS. The
Traditional R&D Tax Credit and the activities must meet the following criteria:
Alternative Simplified Credit (ASC).
Companies applying to the ASC scheme Technological in nature (activities
will be able to offset 14% of the difference undertaken to expand knowledge of
between the current year’s qualified technological sciences such as physics,
research expenses (QRES from now on) biology, engineering or computer
and 50% of the average of the QRES of the science.)
3 prior taxable periods. In the case where a Have a qualified purpose (the purpose of
taxpayer has no qualified research the research is to create or improve
expenditures in any of its 3 preceding tax products or processes, such as improving
years, the credit will range from 6% to 9% of functionality, performance, reliability,
the current year QREs. Taxpayers qualifying quality and cost reductions, which can
for the Traditional R&D Tax credit will be have an impact on the company
eligible for a 20% tax credit based on the performance)
excess amount of QREs over a determined Elimination of uncertainty (the activity is
base amount. The base amount is undertaken with the aim of eliminating
determined by the smaller of the uncertainty about the development or
company’s average annual gross receipts improvement of a process or product.
for the preceding 4 tax years multiplied by These can be uncertainties such as
a fixed- based percentage (3% in the first 5 capability uncertainty, methodology
years of claims) or 50% of current year uncertainty, and product design.)
QREs. Process of Experimentation (the activity
must prove that more than one
Eligible tax liability hypothesis was evaluated for achieving
Corporate income tax, payroll tax credit the desired result)
election for small businesses, and alternative
minimum tax for eligible SMEs.
Carry-back
3 years
Ceiling
None.
Carry-forward
20 years
43
Eligible expenditure To prepare potential audits, claimants can
Wages paid to employees for qualified request a pre-audit and receive an evaluation
services – Supplies used and consumed in the concerning their project and related
R&D process – Contract research expenses expenses. As with other tax credits, the
paid to a US-based third-party outsourcer claimant must keep business records to be
(65% of the cost is allowed) – Basic research able to justify the claimed tax credit.
payments to educational institutions and
scientific research organisations (up to 75% of
the cost). expenditure
R&D performed abroad is not eligible.
Regulatory Body
The Internal Revenue Service (IRS) oversees Compatibility with other grants
the application and legislation of the R&D tax
The R&D Tax Credit is considered a general
credit.
business credit and can be combined with
Claiming procedure other general credits on Form 3800.
Ex-post. However, even if the application is
through self-assessment using Form 6765,
audits may be carried by the IRS to detect
potential frauds.
KEEP IN MIND
On January 3, 2022, the IRS published an official memorandum presenting a list of new elements
that must be provided during the R&D Tax credit claiming process. The five items presented in this
new regulation are:
• Identification of all the business components related to the credit claimed.
• Matching the Qualifying Activities with these business components.
• Presentation of the individuals who performed the activities, by business components.
• All the information individuals sought to discover.
• The total amount of each expenses related to the credit.
In 2022, 174 section changed and now is mandatory to capitalize and amortize the R&D
expenditures.
OTHER INCENTIVES
State credits for Research & Development activities
Every State can offer a specific extra credit for the R&D activities developed in the state.
For example, South Carolina offers a 5% of the R&D qualifying expenditures tax credit.
44 Back to index
BRAZIL
OVERVIEW
Background
In 2005, the Brazilian Federal Government
through the Ministry of Science, Technology
and Innovation passed Law No. 11,196 also
known as “Lei do Bem” which provides a R&D
tax deduction for Brazilian companies
carrying out research, development and
innovation activities.
Through this tax incentive, the federal

FI Group Brazil
government seeks to increase the level of
+55 11 30 31 32 92
R&D investment by the private sector, to

reduce the cost or the risks associated with
such activities and endeavors to bring
companies closer to universities and
TYPES OF INCENTIVES institutes of science and technology.
To maximise their investments in R&D, the

TAX CREDITS/DEDUCTIONS incentive consists of a tax deduction from 60
to 100% to be offset against eligible R&D
expenses, which represents a reduction
between 20.4 to 34% in the corporate income
tax and social security charges (Contribuição
Social sobre o Lucro Líquido).

1.2%

Composed of IRPJ (Income Corporate Tax) at
the rate of 25% and CSLL (Social contribution
on net income) at the rate of 9%.

End of July
45
MAIN INCENTIVE
Volume-based tax deduction. Corporate Income tax (Imposto de Renda
sobre Pessoa Jurídica - IRPJ) & Social
Benefit Contribution Charges (Contribuição Social
Brazilian companies that carry out R&D sobre o Lucro Líquido - CSLL).
activities and are tax compliant can benefit
Ceiling
from an additional tax deduction from 60%
to 100% based on eligible R&D expenses None.
(equivalent to 20.4% and up to 34% final tax
reduction over Corporate Income Tax
Refundable
(IRPJ) and social security contributions No.
(CSLL).
The company must be subject to “Lucro Eligible activities
Real” and have profits during the incurred These activities include designing new
period. products or processes, service or system as
well as the addition of new functionalities or
The intensity of the incentive depends on characteristics to a product or process,
the compliance with the following criteria: resulting in incremental improvements in
a minimum 60% of additional tax competitiveness.
deduction for R&D expenditures, which can Software development qualifies as an R&D
rise to 70% if there is an increase of activity as long as it respects the
researchers less 5% compared to the aforementioned premise.
previous year (up to 80% if the increase is
superior to 5%) and an extra deduction of Eligible expenditure
20% for patented projects. R&D expenditure includes wages, salaries,
fungible, patent, travel costs, projects
The Lei do Bem also provides other developed in collaboration with Universities
benefits for eligible Brazilian companies: and R&D centers and certain payments made
to third parties (e.g., laboratory tests, etc.) that
Tax reduction of 50% on the IPI are directly attributable to the performance
(“Imposto sobre Produtos of qualified R&D activities.
Industrializados”) for the purchase of
equipment exclusively used for R&D.
Instant depreciation of purchased Carry-back
equipment exclusively used for R&D None.
activities and instant amortization of
intangible assents acquired and linked
exclusively to R&D activities. Carry-forward
100% tax reduction of IRRF (“Imposto de 5 years.
Renda Retidona Fonte”) for patents and
trademarks registered abroad.
46
Regulatory Body to 5 years after the tax claim by the Brazilian
Federal Revenue Service (Receita Federal do
The Ministry of Finance and the Ministry of
Brasil).
Sciences, Technology, and Innovation
(Ministério da Ciência, Tecnologia e
Inovações) proposes and oversees policies to
encourage innovation. expenditure
Caliming procedure
Self-assessment. The claim must be included (Ministério da Ciência, Tecnologia e
in the Corporate Income Tax return. Inovações) proposes and oversees policies to
Claimants must fill in the form available on encourage innovation.
the MCTI web page and fill it in before July
31st. Companies must register their eligible Compatibility with other grants
R&D projects and expenses on the website of
In Brazil, several other specific tax incentives
the MCTI. This is a mandatory step before
exist like “Rota 2030” for the automotive
claiming the incentive. Even tough the MCTI
sector or “Lei de Informática” for the
delivers an opinion on the application, it
electronic industry. All of them are
doesn’t have any legal validity. A tax audit can
compatible with the “Lei do Bem”.
be performed up
KEEP IN MIND
In Brazil, technological innovation activities are eligible only when they are developed by companies
in-house and result in greater productivity, quality or competitiveness.
The R&D tax deduction is claimed through self-assessment on the CIT return, as such, in the event of
a tax audit, the justification expected by the tax administration requires double-skilled expertise (as
much on the technical aspect as on the taxation one).
More than 2000 Brazilian companies today use the tax deduction however the amount of recorded
R&D expenditure is still very low compared to most developed countries. Therefore, the government
keeps on looking for improvements to make it more attractive for companies.
OTHER INCENTIVES
Grants
National grants are available for R&D projects developed in Brazil depending on the
sector, the size of the company and the type and date of the grant scheme - please get
in touch with our local team: international@fi-group.com
47 Back to index
CHILE
OVERVIEW
Background
IThe Chilean government is committed to
the improvement of the competitiveness of
its companies by introducing a tax credit for
investment in research and development
(R&D). This initiative led to the publication of
the R&D law in January 2008.
This law allows companies to deduct from

their Corporate Income Tax (CIT) 35% of
FI Group Chile
eligible R&D expenses. Besides, the
+56 2 2760 2270
remaining 65% of the amount invested can

be considered expenses necessary to
generate income, regardless of the
company’s core business.
TYPES OF INCENTIVES
However, because of the law’s restrictions
and because the number of claimants for
TAX CREDITS/DEDUCTIONS these tax benefits was lower than expected,
the Government modified the law to expand
the tax credit available and introduce more
flexibility to the R&D tax incentive regime.
which has been in force since March 2012.

0.32%

25% for SMEs and 27% for Large Companies.

30th of April.
48
MAIN INCENTIVE
Type of incentive Eligible activities
Tax credit based on R&D investment volume. The scope is broad enough and no particular
industry or size is targeted. The eligible
Benefit activities include Basic Research – Applied
Chilean companies, regardless of their size, Research – Experimental Development.
turnover or activity are eligible for a 35% tax
credit for expenditure incurred in R&D
projects and certified by the CORFO Salaries and fees; direct expenses such as
(Chilean Economic Agency for the materials, chemical reagents, IT services, data
Development). analysis including services for financial
management and accounting; Consulting
The R&D activities can be carried out using service and expertise for the development of
the company’s internal resources, which the project as well as project formulation.
can decide whether to use third parties (via
subcontracting of R&D activities). The law Service contracts with third parties directly
also supports activities that are 100% related to project development (at least 50%
entrusted to a specialised R&D centre must correspond to expenses incurred within
listed in CORFO’s register. the country); leasing, or subleasing, real
estate or buildings necessary to develop the
Eligible tax liability activities; expenses related to IP registration
Corporate Income Tax (“Impuesto de Primera rights; and utility expenses, and expenses
Categoría”). related to immovable property that are
related to the project are eligible.
Ceiling
Regulatory Body
The minimum amount for the CORFO to
CORFO for the management of projects’
certify R&D activities is CLP 6.200.000
certification and the Chilean Tax
(€7.300) whereas the threshold is set at
Administration (“Servicios de Impuestos
15.000 UTM (approx. €1.000.000) per year.
Internos”) for the award of the tax credit to
eligible taxpayers.
Refundable
No.
Carry-back
Eligible activities None.
The scope is broad enough and no particular
industry or size is targeted. The eligible
activities include Basic Research – Applied
Carry-forward
Research – Experimental Development. Indefinite.
49
Claiming procedure where R&D expenses have already been
incurred before the certification of the
Ex-ante. Chilean companies willing to apply
CORFO. To do so, claimants will have to
for the tax credit can choose two methods for
request a pre-approval to apply for the R&D
incurring the costs according to the origin of
tax credit.
the R&D projects: through in-house expenses
Once accepted, the claimant will be able to
or through R&D certified contracts with
apply for the R&D tax credit when the
registered research centres.
certification is made effective by CORFO and
Certification all expenses will be deductible retroactively.
The claimant will have up to 18 months to
It is requested before the execution of the deliver the certification request before
R&D eligible projects. Only expenses from the CORFO
date of the certification request will be
considered. Location of qualified research
Once the certification is made effective by expenditure
the CORFO, the claimant will be able to
obtain the R&D tax credit through the R&D activities must be carried out in Chile in
submission of the CIT return on April (Form at least 50% of the total activities.
22) of the year following the requested
Compatibility with other grants
certification.
The amount of public grant awarded for the
Pre-approval eligible R&D project must be deducted from
Another process is available for companies the total expenses calculated for the R&D tax
credit.
KEEP IN MIND
Taxpayers should keep in mind that innovation is not considered as an eligible activity when
applying for the R&D tax credit. Only projects with strong R&D are approved. In 2022, 219 projects
applied, so there is still much ignorance and therefore, there is a significant work of dissemination
to be performed by the Chilean government. The total number of companies that have applied has
been 844.
On the other hand, it should be noted that the Chilean tax administration (SII) cannot refute
CORFO’s certification since the latter is the only entity accredited for this purpose. Nevertheless,
please note that the Tax administration can still audit companies to verify and compare data with
CORFO.
OTHER INCENTIVES
Grants
National grants are available for R&D projects developed in Chile depending on the
50 Back to index
COLOMBIA
OVERVIEW
Background
IIn 2016, Colombia approved a tax reform
which takes effect in fiscal year 2017. Under
the plan, the former R&D tax deduction of
175% has been replaced by a 100% tax
deduction of the R&D expenses + a 25%
deduction of the same R&D expenses against
the total amount of corporate income tax
due. The Colombian government announced
that the budget for the R&D tax deduction is
FI Group Colombia
set at €472 million, which implies a raise of
+57 324 565 9034
€45 million compared to last’s year’s budget.

This significant increase enlightens the

commitment of the Colombian government
TYPES OF INCENTIVES to strengthen science, technology and
innovation as an engine to enhance the
production and competitiveness of national
TAX CREDITS/DEDUCTIONS companies. In 2021, 352 companies benefited
from the Colombian tax deduction every year.
This situation casts light on the critical
dissemination work to be performed by the
Colombian government to attract new
claimants.

0.3%

35%

Due date set by the government, usually
occurs between March and April.
51
MAIN INCENTIVE
Tax benefits Based on R&D&i investment Up to €17 millions for investments in R&D&i
volume. per company per year.
Benefit Refundable
Colombian Micro-enterprises and SMEs are SMEs: Yes, for loss making companies or
able to claim a tax credit of 50% of the when the amount of tax deduction is
eligible R&D&i expenses. From 2023, Large greater than the tax liability, the exceeding
Companies are able to apply to tax credit if amount can be offset against other national
they have a project including taxes or refunded
Microenterprises and SMEs. The amount of Large companies: No
tax deduction can be used against the
Corporate Income Tax. Eligible activities
Projects for investments in scientific research
For loss making companies or when the (basic/applied research and experimental
amount of taxcredit is greater than the tax development), technological innovation
liability, the exceeding amount can be (prototypes, operating systems, processes)
offset against other national taxes (as such and innovation (whether applied to a
as Value added tax). Besides, Micro- product, process or an organization).
enterprises and SMEs are also allowed to
request a refund of the tax credit from €
8K to the Colombian Tax Administration
(DIAN) which can be sold to another R&D staff / Purchase of R&D&i equipment /
company. Consumables / SpecializedSoftware license
/Subcontracting services / IP costs.
Besides, Colombian companies may apply
for a 30% discount of their R&D&i expenses
on the total amount of their corporate
income tax.
Carry-back
Claiming process' fiscal
Eligible tax liability year.
Corporate Income Tax (Impuesto sobre la Carry-forward
Renta) and other national taxes (Tax credit). Tax discount usable up to 4 years.
Tax credit for SME is valid for 2 years
52
Regulatory Body to 5 years after the tax claim by the Brazilian
Federal Revenue Service (Receita Federal do
Brasil).
(Ministério da Ciência, Tecnologia e
Inovações) proposes and oversees policies to
encourage innovation. expenditure
Caliming procedure
Self-assessment. The claim must be included (Ministério da Ciência, Tecnologia e
in the Corporate Income Tax return. Inovações) proposes and oversees policies to
Claimants must fill in the form available on encourage innovation.
the MCTI web page and fill it in before July
31st. Companies must register their eligible Compatibility with other grants
R&D projects and expenses on the website of
In Brazil, several other specific tax incentives
the MCTI. This is a mandatory step before
exist like “Rota 2030” for the automotive
claiming the incentive. Even tough the MCTI
sector or “Lei de Informática” for the
delivers an opinion on the application, it
electronic industry. All of them are
doesn’t have any legal validity. A tax audit can
compatible with the “Lei do Bem”.
be performed up
KEEP IN MIND
In Brazil, technological innovation activities are eligible only when they are developed by companies
in-house and result in greater productivity, quality or competitiveness.
The R&D tax deduction is claimed through self-assessment on the CIT return, as such, in the event of
a tax audit, the justification expected by the tax administration requires double-skilled expertise (as
much on the technical aspect as on the taxation one).
More than 2000 Brazilian companies today use the tax deduction however the amount of recorded
R&D expenditure is still very low compared to most developed countries. Therefore, the government
keeps on looking for improvements to make it more attractive for companies.
OTHER INCENTIVES
Untaxed Income
National grants are available for R&D projects developed in Brazil depending on the
53 Back to index
URUGUAY Operational Hub
OVERVIEW
Background
The Credit tax Incentive was created by Law
19.739/2019, establishing that Corporate
Income Taxpayer and Transfer of Agricultural
and Livestock Assets Taxpayer, who incurs
R&D expenses, will be able to access a tax
credit between 35%-45% of said certified
expenses.
Decree 407/2019 regulated the tax credit,

FI Group Chile
where it was established that the National
+56 2 2760 2270
Agency for Research and Innovation (ANII) is

the technical entity in charge of
implementing the scheme referred to in this
law.
TYPES OF INCENTIVES
In 2023, Ministry of Economy and Finance
(MEF) has established that the total amount
TAX CREDITS/DEDUCTIONS of tax benefits to be assigned during this year
will be UYU 149,500,000 (€ 3,5 MM), which
means a growth of around 7% in relation to
NEXT GENERATION EU FUNDS 2022.

0.5%

25% (except free zone)

Due date set by the government, between
January and December, based on the ID of
the companies. Certificate issuance is
quarterly, prior approval by ANII.
54
MAIN INCENTIVE
Tax benefits Based on R&D expenditures Training services Wages of R&D staff
volume. Purchase of R&D equipment
Consumables
Benefit Consulting services
Uruguayan Companies are able to claim a IP costs
tax credit of 35% of the eligible R&D Contributions to R&D centers
expenses in projects developed directly
with their own resources. Regulatory Body
National Agency for Research and Innovation
The Tax credit will increase to 45% of the (ANII) is the authorized entity in charge of the
eligible R&D expenses if the project is process for R&D project which apply for tax
executed in conjunction with Universities credit. Its ruling on the eligibility of projects is
or Technology Centers. mandatory before the application of the
incentive
Refundable
No. Besides, the Uruguayan Tax Authority
(Dirección General Impositiva- DGI), is the
Ceiling entity in charge of issuing the corresponding
The maximum amount is 9.000.000 Units tax credit certificates.
Taxes (€1,2 MM) per fiscal year.

Corporate Income Tax (Impuesto a la Renta
de las Actividades Económicas - IRAE) and Carry-back
None
Transfer of Agricultural and Livestock Assets
Tax (Impuesto a la Enajenación de Bienes
Agropecuarios – IMEBA) and other national
Carry-forward
Income Tax.
None
Eligible activities
The eligibility of R&D projects implies that the
project fits within the scope of the definitions
provided by National Agency for Research
and Innovation (ANII). The scope is broad
enough and no particular industry or size is
targeted.
55
Claiming procedure Location of qualified research
Prior approval of the State is mandatory, expenditure
obtained byNational Research and The R&D project and related expenditure
Innovation Agency (ANII). must be performed in Uruguay.
The average time response of ANII when Compatibility with other grants
evaluating the submitted projects is 120 days.
Tax credit is not compatible with public
In the meantime, additional details and
grants.
requirements may be requested from the
claimant (Max. 60 days)
KEEP IN MIND
According to the criteria established by the ANII, the projects must be executed within a period of no
more than 36 months from their approval. In addition, the expense associated with the project will
be valued in current tax units.
During the course of the project, the beneficiary must submit to the ANII, progress reports and proof
of R&D expenses incurred. ANII will corroborate that the activities and the expenses in the period,
are pertinent and in accordance with the proposed project.
56 Back to index
PERU Operational Hub
OVERVIEW
Background
In Peru, investment in R&D is low as it
accounts for 0.17% of GDP, whereas the
average in Latin America is less than 1%.
However, the Peruvian government keeps on
investing every year to promote and
stimulate the country’s R&D&i. As such, in
2013, the government passed Law 30,056
which aims to encourage Peruvian
companies to invest in the development of
FI Group Chile
innovative activities.
+56 2 2760 2270
Taxpayers incurring expenses in R&D&i
projects could benefit from a 100% deduction
of eligible expenses on their corporate
TYPES OF INCENTIVES income tax liability. Thus, given its will to
increase awareness and greater use of the
new R&D&i tax deduction system, the
ADDITIONAL DEDUCTIONS Peruvian government has decided to review
the incentive and significantly increase the
amount of the R&D&i tax deduction.
In 2023, Law 30.309 was modified by Law

31.659 which allows taxpayers to benefit from
a deduction of between 190% and 240% of
R&D expenses incurred. The Peruvian
government officially extended the R&D&i tax
deduction until December 31st, 2025.

0.2%

10% - 29.5%

Until first week of April.
57
MAIN INCENTIVE
Type of incentive Eligible companies will choose to develop
their projects directly with their own
Additional deduction based on R&D
resources or indirectly through advance
expenditures volume.
subcontracting R&D&i services from an
Benefit approved scientific research, technological
development and/ or technological
Peruvian companies may apply for an
innovation centre. The subcontracted centre
additional deduction based on R&D&i
must be approved by CONCYTEC (Peruvian
expenditures volume,
National Council for Science, Technology
depending on the following situations:
and Innovation).
Large Companies: Income more than

€2,6MM (2.300 Tax Unit) Eligible tax liability
Income Corporate Tax (Impuesto a la Renta
190% deduction on the expenses de Tercera Categoría)
incurred if the project is executed
directly by the taxpayer or through Ceiling
research, technological development or The annual tax deduction cannot exceed 500
innovation centres established in Peru. UIT (S/ 2,500,000 = €602,000).
160% deduction on the expenses
incurred if the project is executed by Refundable
research, technological development or
No.
innovation centres outside of Peru.
Micro companies and SMEs: Income

Eligible activities
companies over to €2,6MM (2.300 Tax Unit) The eligibility of R&D&i projects implies that
the project fits within the scope of the
240% deduction on the expenses definitions provided by the Peruvian
incurred if the project is executed Corporate Income Tax Law. These definitions
directly by the taxpayer or through are based on the Frascati Manual.
research, technological development or Technological Innovation activities are
innovation centres established in Peru. eligible for the R&D&i tax credit.
190% deduction on the expenses incurred if
the project is executed by research,
technological development or innovation Carry-back
centres outside of Peru. None
Carry-forward
None
58
Claiming procedure Claiming procedure
Wages of R&D&i staff who need to be Ex-ante. Once the pre-approval and
registered on the DINA (National Online certification have been issued (within 30
platform for the identification of certified business day of the request being made) by
scientific personnel). CONCYTEC, claimants can apply the tax
deduction. As such, the eligible R&D&i
Investment costs such as Equipment
expenses incurred will be deducted during
(purchase of tools, software, laboratory
machines) and facilities (scientific buildings, the fiscal year in which the application for
infrastructure upgrade) used for the pre-approval and certification were
development of the R&D&i project. obtained. Finally, the R&D&i tax deduction
will be requested through the Corporate Tax
Other eligible expenditures are: return online via the “SUNAT” website in
April.
Materials and consumables (IT licenses,
fares, raw materials, bills) Location of qualified research
Rent (goods, offices, equipment, expenditure
machines, cars) necessary for the There is no restriction except that the
development of the R&D&i project intensity of the R&D&i tax deduction will
Subcontracting expenses to third parties
depend on the location of R&D expenditure.
Intellectual and industrial property costs
(patents).
Regulatory Body The amount of public grant awarded for the
R&D&i project must be deducted from the
CONCYTEC is overseeing the eligibility, pre-
approval and certification of the R&D&i total expenditure calculated for the R&D&i
projects whereas SUNAT (Superintendencia deduction.
Nacional de Aduanas y de Administración
Tributaria) is the organization that enforces
taxation in Peru & grants the tax deduction.
KEEP IN MIND
Researchers or specialists who develop the projects must be registered in the Directory of CVs
related to Science and Technology (CTI Vitae of Concytec).
In case of subcontracting R&D services, the claimant can change the R&D centre only if the new
centre has the authorization of CONCYTEC in the same research discipline as the approved project.
Claimants will be asked to keep control of accounts for each project, duly supported, either by the
taxpayer or by the subcontracted R&D centers. Finally, the result of the R&D project or technological
innovation can be registered in INDECOPI (National Institute for the Defense of Free Competition
and the Protection of Intellectual Property) if appropriate.
59 Back to index
ARGENTINA Operational Hub
OVERVIEW
Background
In Argentina, the Law 27.506 established The
Regime to Promote the Knowledge
Economy, the objective of this regime is to
promote economic activities that apply the
use of knowledge and the digitization of
information supported by advances in
science and technologies, to the obtaining of
goods, provision of services and / or
improvements of processes, with the scope
FI Group Chile
and limitations established in the present law
+56 2 2760 2270
and the regulatory rules that are dictated in

its consequence.
This regime establishes three different

TYPES OF INCENTIVES taxincentives: Reduction of income tax, tax
credit base on employer contributions paid to
the social security systema and Exemption
REDUCTION OF INCOME TAX from value added tax (IVA) payment in export
of promoted activities.
TAX CREDIT BASED ON
EMPLOYER CONTRIBUTIONS PAID This law is intended primarily for MSMEs and
TO THE SOCIAL SECURITY SYSTEM. other large companies that perform R&D
activities related to technology and science.
The incentives are currently valid until

December 31, 2029.

0.5%

25% - 35%

During June 2023
60
MAIN INCENTIVE
Reduction of Income Tax. Income Tax (Impuesto a las ganancias)- .
Tax credit based on employer contributions Reduction benefit.
paid to the Social Security System.
Other national income tax - Tax Credit
Benefit
Ceiling
Argentina companies may apply the
Tax Credit for social security contributions
following benefits:
paid: Limited to 3,745 employees + new
additions.
20-60% Reduction of income tax,
according to company size. (tax 25-35%).
The Discount is untransferable to third
Tax Credit for social security
parties and not applicable to cancel previous
contributions paid: Discount on
debts.
national taxes corresponding to Eligible expenditure
70%-80% of social security contributions
To enroll in the National Registry of
paid to the staff dedicated to R&D
Beneficiaries of the Regime for the
activities.
Promotion of the Knowledge Economy,
Exemption from value added tax (IVA)
companies could prove this requirements
payment in export of promoted
with the following expenditures:
activities.
Expenses incurred the development of basic
research, applied research and/or
Companies must comply the following
technological development, wages of R&D
requirements:
staff Investment costs such as Equipment
(purchase of tools, software, laboratory
1. 70% of the invoicing must be
machines) and facilities (scientific buildings,
generated from R&D activities
infrastructure upgrade) used for the
promoted.
development of the R&D project, prototype
2. At least, two of these requirements
validation activities, financial and economic
must be complied:
feasibility expenditures.
Quality certification of products,
services or processes (or Improvement
plan).
Investing in training or R&D.
Carry-back
None
Exporting R&D goods or services
Carry-forward
24 months, extendable
Refundable for 12 months more.
No.
Ceiling
The maximum amount is 9.000.000 Units
Taxes (€1,2 MM) per fiscal year.
61
KNOWLEDGE ECONOMY SECRETARIAT is expenditure
the authorized entity in charge of the register The promoted activities and related
for companies which apply to get benefits. It expenditure must be performed in
is mandatory before the application of
Argentina.
benefits to be enrolled.
Caliming procedure
Does not apply.
Application must be made in the Remote
Procedures Platform (TAD) and electronic
documental management System (GDE).
Prior approval is mandatory, obtained by
Knowledge Economy Secretariat.
Taxpayer must validate the registration
each 2 years.
KEEP IN MIND
The KNOWLEDGE ECONOMY SECRETARIAT will issue monthly Tax Credit Certificates from the
following that the enterprise month got enrolled in the National register National Registry of
Beneficiaries of the Regime for the Promotion of the Knowledge Economy.
As a verification and control activity, the competent authority may annually audit the beneficiary
entities on compliance with the established requirements. Besides, the beneficiary companies must
comply with the biennial revalidation proving an increase in the additional requirements
62 Back to index
03
ASIA
63
JAPAN
OVERVIEW
Background
Since the 2000s, the incentive has greatly
varied. Starting off as a specific R&D incentive
for SMEs (10%), completed with an
incremental incentive (15%) for any company
profiles, it evolved into a more generous
incentive in 2006 (SMEs: 12%, Large: 10-12%).
Since 2008, a temporary incentive (High R&D
intensity) boosts the credit allowed to
companies that put their efforts into R&D
FI Group Japan expenses growth. Since 2015, the incremental
international@fi-group.com incentive was supressed in favour of a second
permanent incentive called “Open
Innovation” that enhances R&D
collaborations (30% for public entities and
TYPES OF INCENTIVES 20% for private entities). In 2020, 9,230 firms
claimed a R&D tax credit The R&D tax credit
amount reached 505.3 billion yen (€3,8B) for
TAX CREDITS/DEDUCTIONS the same year. The number is almost stable,
around 9,000 claiming companies, since 2013.

3.2%

The average effective corporate tax rate is
EUROPE FUNDING
29.74% for large corporations, and ranges
from 25.84% to 33.58% for SMEs depending
on their taxable income amount.

2 months after the end of company’s fiscal
year. It can be extended to 3 months if the
extension application is filed.
64
MAIN INCENTIVE
Volume-based and incremental tax credits. R&D staff - R&D Trip expenses - Operating
cost of IT material & machines (electricity,
Benefit water, gas, etc) - Purchase of software used
for R&D purposes (depreciation charges) –
Japanese companies can apply for a tax
Raw materials – Subcontracting activities to
credit of their qualified R&D expenses
collaborating public R&D centers/universities/
incurred in the tax year. The ratio is
bodies and private companies – Fields and
calculated according to the company’s
buildings (depreciation charges) – Intellectual
status (SME, large company) and its R&D
Property acquisition from SMEs only.
expenses growth along the 3 years
preceding the current fiscal year.
Regulatory Body
An additional credit is granted for The NTA (National Tax Agency) oversees the
collaboration with various entities, equal to R&D tax credit. Potential tax audits can be
30% of all qualified expenses for public organised by the tax authorities after
collaboration (National R&D institutions, application of the tax credit for a period of 5
Universities, etc.) 25% for R&D ventures years after the declaration date.
companies and 20% for private
collaboration (private companies, R&D The METI (Ministry of Economy and Industry)
partnerships). provides guidelines on the R&D eligibility and
the handling of R&D Tax Credit.
Corporate Income Tax (“ 法人所得課税 (Hōjin They are the only competent authority
allowed to answer questions about R&D Tax
shotoku kazei)”)
Credit. Questions can only be addressed by
Ceiling companies to their local tax office, and obtain
usually an oral answer (there is no guaranty
25% of corporation tax liability for the
for a written proof of answer).
first incentive (40% for R&D venture
companies).
10% of corporation tax liability for the
second incentive (Open Innovation). Carry-back
10% of corporation tax liability for the No.
High R&D intensity boost.
Refundable Carry-forward
None.
No.
Eligible activities
Improving techniques or crafting of goods,
developing new inventions or elaborating
new services.
65
Ex-post. Self-assessment. The amount of governmental and non-
governmental grants awarded for the eligible
Location of qualified research R&D project must be deducted from the total
expenditure pool of expenditures included in the SR&ED
tax credit claim.
The R&D activities must be performed in
Canada. If it’s performed abroad, the SR&ED
work must be undertaken by the employees
of the claimant and must form part of the
SR&ED work carried in Canada. Limited to
10% of the total of the salaries or wages for
SR&ED conducted in Canada.
KEEP IN MIND
The review of the tax credit application by a Zeirishi (Japanese Certified Public Accountant) is highly
recommended to ensure the strength of the company’s claim.
To be able to extend the period of filling for the blue tax return form, a company has to submit an
application for approval to the Tax Offce in the prescribed format before specific deadlines.
R&D costs incurred on a Japanese company should be ultimately born by such company, especially in
case of international firms. In case of re-invoicing abroad, the company would loose the benefit of
R&D Tax Credit on re-invoiced expenses in Japan, and most probably on the country where the costs
are ultimately borne.
OTHER INCENTIVES
Grants
National and European grants are available for R&D projects developed in Japan
scheme. They can be found mainly through 3 major governmental agencies : JST, JSPS
(for Fundamental & Applied research) and NEDO (for experimental development &
industrialization).
Ranging from Y5M to Y50M, the funding can reach much larger sums depending on the
available tenders and government goals at the time. If you wish to find out more about
grants that could potentially benefit your activities in Japan, please get in touch with our
local team: international@ fi-group.com
66 Back to index
SINGAPORE
OVERVIEW
Background
Research and Development plays a key role
in Singapore’s ambitions to be an innovation-
driven and value-creating economy. From
the introduction of the Productivity and
Innovation Credit (PIC) Scheme in 2010 to the
enhancements of the current scheme, the
generous framework of R&D tax incentives
has benefitted many businesses. Over the
past decade, the Government has continued
FI Group Singapore
to improve the available R&D programs to
+65 8727 2690
incentivise eligible activities carried out in

Singapore, performed in-house or
outsourced or as part of any cost sharing
agreement, as long as the taxpayer is the
TYPES OF INCENTIVES beneficiary of the R&D activities. Therefore,
the tax deduction incurred on qualifying R&D
projects ranges from 100% to 250% from
TAX CREDITS/DEDUCTIONS FY2019 to FY2025. E-declaration and
extensive guidelines from the tax
administration make the incentive easier to
use as the taxpayer doesn’t need to apply to
any government agency for these R&D tax
measures.
PATENT BOX GERD as % of GDP (2022)

2.2%

17%

30th of November.
67
MAIN INCENTIVE
Type of incentive To acquire new knowledge, or create new
products/processes, or improve existing
Volume-based tax deduction.
products or processes
Benefit
To bring novelty (being the first of its kind
Singaporean companies can apply for a tax in Singapore) or technical risk (Scientific
deduction of 250% for eligible R&D or technological uncertainty that cannot
expenses incurred inside Singapore. In the be readily resolved) .
meantime, eligible R&D expenses carried
out overseas can benefit from a 100% tax To follow a systematic, investigative and
deduction. experimental study in a field of science or
Based on the current corporate Income tax technology.
rate, the 250% R&D tax deduction will
equate to an after-tax benefit of 42.5% Eligible expenditure
whereas the 100% tax deduction equals to
Eligible expenditure includes staff costs,
an after-tax benefit of 17% for overseas
consumables and contracted R&D
activities.
expenditure.
With the new Enterprise Innovation
Scheme (EIS), introduce by the
When the R&D work is contracted to an R&D
Singaporean government with Budget
organization or is performed under an R&D
2023, the tax deduction rate will be
cost-sharing arrangement (CSA) and a
enhanced to 400% on first $400,000 of
breakdown of the expenditure is not
qualifying R&D expenditure for FY 2023 to
available, the eligible R&D expenditure is
FY 2027. Based on the current corporate
deemed to be 60% of the payments made to
Income tax rate, this will bring the after-tax
the R&D organization or under the CSA.
benefit at 68% for the first $400,000 of
qualifying R&D expenditure. Regulatory Body
Eligible tax liability The expenditure claimed is processed by the
Singapore tax authority the Inland Revenue
Corporate Income Tax. Authority of Singapore (IRAS.)
Ceiling
None. Carry-back
No.
Refundable
No.
Carry-forward
Eligible activities Indefinite.
A qualifying R&D project must fall within the
definition of “R&D” under section 14C and
14D. A of the Income Tax Act. There are three
requirements:
68
Claiming procedure that projects included in R&D claims satisfy
the requirements.
Ex-post. Companies are not required to seek
To undertakes at least 5 R&D projects in-
Government preapproval for the R&D Tax
house in the concerning year.
Measures. To be eligible, a company must
The qualifying R&D expenditure for these
submit the claim in its income tax return and
projects is at least $500,000.
tax computation with the completed R&D
form. Location of qualified research
All claimants are required to complete an expenditure
R&D form, which includes a detailed
description of each claimed R&D project Eligible R&D expenses carried out in
based on prescribed guidelines. Singapore will benefit from the 250% tax
To provide upfront certainty on their R&D deduction whereas overseas eligible R&D
claims for up to 3 FY, the IRAS has expenses can benefit from a 100% tax
implemented a Pre-claim Evaluation process deduction.
called “R&D Assurance Framework”.
Compatibility with other tax
To apply to this R&D Assurance Framework,
companies are required to:
incentives
Maintain good internal evaluation process The amount of public grant awarded for the
and supporting documentation to prove eligible R&D project must be excluded from
the total expenses calculated for the R&D tax
deduction.
KEEP IN MIND
In order to be able to claim to the R&D Tax Measures, the taxpayer must be the beneficiary of the
R&D activities. This implies: Bears the financial burden of carrying out the R&D activities. Effectively
owns and being able to commercially exploit the know-how, intellectual property or other results of
the R&D activities.
Hence, in case of intragroup arrangements, international companies should analyze their IP sharing
and cost reinvoicing agreements. One of the potential solutions might be to conclude a cost sharing
agreement with their Singaporean subsidiary.
OTHER INCENTIVES
Patent Box
The IP Development Incentive (IDI) allows company to benefit from a reduced corporate
tax rate of either 5% or 10% on a percentage of qualifying IP income derived by it during
a period of 5 to 10 years, renewable for another 10 years.
The Economic Development Board (EDB) assess a company’s eligibility to the scheme
based on a significant investment to the Singapore economy. Furthermore, companies
that are eager to benefit for this scheme must document and justify the R&D nature of
their projects (similarly to the R&D Tax Measures described above).
Grants
National grants are available for R&D projects developed in Singapore depending on
the sector, the size of the company as well as the type and date of the grant scheme,
please get in touch with our local team: international@fi-group.com
69 Back to index
AUSTRALIA Partner
OVERVIEW
Background
In 1985-86, Australia introduced one of the
most generous tax incentives in the world:
the R&D taxation concession. Following its
replacement by the R&D tax incentive from 1
July 2011, the scheme has been the Australian
Government’s principal measure to enhance
and increase the amount of research and
development undertaken by Australian
businesses. Over the past 25 years, both tax
FI Group Australia programs have experienced a number of
international@fi-group.com reviews to assess and measure their success.
The latest change to the incentive rates apply

to R&D conducted from 1 July 2021. Eligible
TYPES OF INCENTIVES companies can receive a premium on top of
their corporate tax rate depending on the
turnover of their business and the existing
TAX CREDITS/DEDUCTIONS annual R&D expenditure ceiling has been
increased from AUD 100 million to 150 million.
Over the last decade, the number of R&D tax

incentive recipients increased in Australia
from around 7,900 in 2012 to 10,800 in 2019.
With SMEs accounting for the majority of
QUALIFIES FOR HORIZON R&D tax incentive recipients in Australia with
EUROPE FUNDING an average share of 85%.

NEXT GENERATION EU FUNDS 1.79%

• For companies with aggregated turnover
PATENT BOX
under $50M: 26% (FY 2020-2021) & 25% (FY
2021-2022) • For all other companies: 30% (FY
2020-2021 & FY 2021-2022)

3 months after the end of fiscal year.
70
MAIN INCENTIVE
Volume-based tax deductions. Ceiling R&D tax relief: The value of the
deduction may not exceed the amount of
Benefit income in a given tax year. Robotization tax
relief: the value of the deduction may not
R&D tax relief: From January 1, 2022, all
exceed the amount of income in a given tax
companies based in Poland can claim a
year. Prototype tax relief: the amount of the
200% of eligible R&D expenditure related
deduction cannot exceed 10% of the income
to salaries of R&D staff as a reduction of
earned from sources other than capital
their tax base from current year’s
gains in a tax year.
expenditure. Same benefit applies for
companies entitled to a R&D centre status,
Refundable
however, the deduction of 200% can be
applied for all types of eligible costs. Polish R&D tax relief: Startups can benefit from
companies claiming benefits under the “cash back”. If the company is loss making in
Polish Investment Zone will not be eligible the year it started operating, the incentive
for the R&D tax deduction. Prototype Tax can be offered in cash.
Relief: allows a deduction from the tax base
of 30% of the sum of the costs of the trial
Eligible activities
production of a new product and the R&D Tax relief is available for companies
launch of a new product. Robotization Tax carrying out activities falling withing the
Relief: allows for an additional deduction scope of R&D works that are defined in the
(50%) from income of robotization costs. tax law. According to statutory definition, the
Robotization relief is available only for tax research and development activity (R&D) is a
costs incurred in the years 2022 through creative activity involving research or
2026. Innovative Employees Tax Relief: If a development, undertaken in a systematic
taxpayer suffered a loss or earned income manner to increase knowledge resources
that does not allow for full deduction of the and to use knowledge resources to create
R&D tax relief, the company can reduce the new applications. Prototypes tax relief is
monthly Personal Income Tax advance available for companies which run a trial
payments remitted as an employer by 19% production of new products and markets a
of the value of the R&D relief not claimed in new product. Robotization tax relief is
whole. This provision will apply to advance available for production entities which are
tax payments withheld from salaries of investing in automation of their plants.
employees whose involvement in R&D
projects accounts for at least 50% of their
Carry-back
monthly working time. Limited

Corporate Income Tax & Personal Income Tax. Carry-forward
None
71
Regulatory Body Regulatory Body
R&D Tax relief: Salaries (wages, allowances, he incentives are administered by the
bonuses, overtime, leave, superannuation, Ministry of Finance.
payroll tax and workers insurance) - Civil law
agreements (contract of mandate, contract Claiming procedure
work) - Materials & Supplies (all materials and Ex-post. Self-assessment program. To benefit
supplies used for R&D including low cost from the tax relief, each entity needs to
laboratory equipment) - Co-operation with perform R&D works and prepare a record of
Scientific Units (costs of analysis, research, the eligible costs incurred in relation to R&D
development and comparable services) - works in a given year. There is no specific
Renting of research equipment - Acquiring separate reporting apart from having internal
legal protection for technical knowledge (all justification and documentation supporting
costs made to acquire patent and other classification of certain costs as R&D
similar legal protection in Poland and the EU) expenditures. A company claiming R&D tax
- Amortization (intangible assets) and relief must submit an appendix (CIT BR / PIT
depreciation (fixed assets) used in R&D, BR) to its annual tax return. Tax authorities
excluding houses, buildings and cars. may review the deduction during a regular
Robotization tax relief: Costs of purchasing tax audit. In Poland, the statutory limitation
new industrial robots (and related machines period is five years.
and devices), software used for the correct
operation of robots, as well as training costs Location of qualified research
for employees on how to use them. Prototype expenditure
Tax Relief: purchase price or production cost Eligible R&D activities must take place in
of new fixed assets necessary to start trial
Poland.
production of a new product, purchase costs
of materials and raw materials purchased Compatibility with other grants
solely for the purpose of trial production of a
The amount of public grant awarded for
new product, costs of improvement incurred
to adapt the fixed asset to launch trial
production of a new product, research, the total expenses calculated for the R&D
expertise and certification costs, product life tax deduction.
cycle studies, environmental technology
verification system.
KEEP IN MIND
The obligation to maintain accounting records for tax purposes is indicated in Article 9 of the CIT Act
or Article 24a of the PIT Act. Taxpayers are obliged to keep accounting records, in accordance with
separate regulations, in a manner ensuring the calculation of the amount of income (loss), tax base
and the amount of tax due for the tax year, as well as to include in the records of tangible and
intangible assets information necessary to calculate the amount of depreciation. Taxpayers
conducting R&D activity who claim for R&D tax deduction are obliged to separate in their records the
costs of research and development activity, so it allows to separate the qualified costs incurred.
72 Back to index
Next Generation
NextGenerationEU is a temporary recovery instrument which can raise up to some €800 billion
through bond issuance. It is at the heart of the European Union (EU) response to the coronavirus
crisis and has the ambition to support the economic recovery and build a greener, more digital
and more resilient future.
The centrepiece of NextGenerationEU is the Recovery and Resilience Facility (RRF) - an

instrument to offer grants and loans to support reforms and investments in the EU Member
States with a total value of €723.8 billion. Part of the funds – up to €338 billion – are being
provided in the form of grants. The other part – up to €385.8 billion – are going for Union loans to
individual Member States. These loans will be repaid by those Member States.
The RRF entered into force on 19 February

2021. It finances reforms and investments
in Member States from the start of the
pandemic in February 2020 until 31
December 2026. To finance
NextGenerationEU, the European
Commission, on behalf of the EU, will
borrow on the capital markets.
So far, the Commission has raised

€78.5 billion in long-term funding through
bonds and €33 billion in short-term
funding through 3-months and 6-months
EU-Bills (of which €12 billion have already
matured). To benefit from the support of
the Facility, Member States
submitted their Recovery and Resilience
Plans to the European Commission.
Each plan sets out the reforms and

investments to be implemented by end-
2026 and Member States can receive
financing up to a previously agreed
allocation. In addition, NextGenerationEU
is reinforcing several EU programmes.
The Recovery and Resilience Facility is performance based. Fulfilment of agreed milestones and
targets towards achieving the reforms and investments in the plans will unlock regular payment.
The implementation of the RRF is firmly underway, with all national plans in place, including the
revised plans of Luxembourg and Germany, and 16 payment requests already processed, another
three already positively assessed and awaiting the Council's opinion, and eight with an
assessment ongoing.
To date (March 2023), the Commission has disbursed a total of over EUR144 billion under the
Facility, in both grants (EUR97 billion) and loans (EUR47 billion). Many more disbursements are
expected as the implementation of the RRF is moving towards the second half of its lifetime. The
Commission estimates that the investments funded by NextGenerationEU could boost the EU's
GDP by around 1.5% in 2024.
73
The Recovery and Resilience Facility is performance based. Fulfilment of agreed milestones and
targets towards achieving the reforms and investments in the plans will unlock regular payment.
The implementation of the RRF is firmly underway, with all national plans in place, including the
revised plans of Luxembourg and Germany, and 16 payment requests already processed, another
three already positively assessed and awaiting the Council's opinion, and eight with an
assessment ongoing.
To date (March 2023), the Commission has disbursed a total of over EUR144 billion under the
Facility, in both grants (EUR97 billion) and loans (EUR47 billion). Many more disbursements are
expected as the implementation of the RRF is moving towards the second half of its lifetime. The
Commission estimates that the investments funded by NextGenerationEU could boost the EU's
GDP by around 1.5% in 2024.
PAYMENT REQUEST BUDGET PAYMENT REQUEST AMOUNT OF NET PRE-

COUNTRY
DATE TYPE DESCRIPTION FINACING

2nd

29/07/2022 Grants Payment 12.000.000.000
SPAIN 27/12/2021 Grants 1st 10.000.000.000
17/08/2021 Grants Payment 9.036.636.649
Pre-Financing

1st
04/03/2022 Grants 7.400.000.000
FRANCE Payment
19/08/2021 Grants 5.117.881.402
Pre-Financing
2nd

Payment
08/11/2022 Loans 11.000.000.000

1st
13/04/2022 Grants 10.000.000.000
ITALY Payment
13/04/2022 Loans 11.000.000.000
1st
13/08/2021 Grants 8.954.466.787
Payment
13/08/2021 Loans 15.938.235.352
Pre-Financing
Pre-Financing
GERMANY 26/08/2021 Grants Pre-Financing 2.250.000.000
2nd

Payment
08/02/2023 Grants 2nd 1.711.608.000

08/02/2023 Loans Payment 108.750.000

09/05/2022 Grants 1st 553.441.000

PORTUGAL
09/05/2022 Loans Payment 609.000.000
03/08/2021 Grants 1st 1.807.948.257
03/08/2021 Loans Payment 350.870.000
Pre-Financing
Pre-Financing
BELGIUM 03/08/2021 Grants Pre-Financing 770.113.932
74
To date, the Commission has disbursed a first payment to Spain. Spain was the first Member
State to submit a payment request on 11 November 2021, following the signing of the operational
arrangements. Spain’s first payment request concerns the satisfactory fulfilment of 52 milestones,
mainly relating to reforms that were already implemented by the second quarter of 2021.
Breakdown of distribution of funds
The REPowerEU Plan, introduced in May 2022 as the EU's response to the global energy crisis,
recognised the role of the RRF in achieving secure, affordable and green energy. Under this Plan,
the RRF will support Member States in putting forward critical reforms and investments to
rapidly phase-out the EU's dependence on Russian fossil fuels and foster zero-carbon sources and
energy resilience. These new or scaled-up measures, to be included in dedicated REPowerEU
chapters, will come on top of the already ambitious green agenda put forward by Member States
in the existing recovery and resilience plans. The Green Deal Industrial Plan, presented on 1
February, puts the RRF and REPowerEU at the centre of the Union's response to the structural
challenges affecting the competitiveness of the EU's clean-tech sector. The RRF funds is available
to Member States to finance measures promoting the greening of industry, supporting EU net-
zero industry projects, and assisting energy-intensive industries in the face of high energy prices.
To effectively sharpen Europe's competitive edge for the net-zero age, REPowerEU considerably
strengthened the RRF's financial firepower. Now, Member States have access to close to EUR 270
billion, with EUR 225 billion in remaining RRF loans, EUR 20 billion in new grants and up to EUR
23 billion in grant transfers from other EU funds.
On March 2023 The European Commission has adopted today a new Temporary Crisis and
Transition Framework to foster support measures in sectors which are key for the transition to a
net-zero economy, in line with the Green Deal Industrial Plan.
The new Temporary Crisis and Transition Framework amends and prolongs in part the
Temporary Crisis Framework, adopted on 23 March 2022 to enable Member States to support the
economy in the context of Russia's war against Ukraine and already amended on 20 July 2022
and 28 October 2022. Together with the amendment to the General Block Exemption Regulation
(‘GBER') that the Commission endorsed in March 2023, the Temporary Crisis and Transition
Framework will help speeding up investment and financing for clean tech production in Europe.
This prolongs the possibility for Member States to further support measures needed for the
transition towards a net-zero industry. This concerns in particular schemes for accelerating the
rollout of renewable energy and energy storage, and schemes for the decarbonisation of
industrial production processes, which Member States may now set up until 31 December 2025.
75
FI Group international network &
philosophy
FI Group has always made the choice to have This global coordination, with locally
an international positioning. The main idea specialised action, is also the main aspect of
was to be able to create connections between our work on the growth of our clients’ R&D
the different R&D tax incentives of different savings. From an R&D tax credit perspective,
countries and thus help our clients to be more these initiatives allow our clients to reduce the
competitive. Indeed, FI Group is convinced number of advisors, and take advantage of the
that investments in R&D must be considered existing synergies from the point of view of the
from a global and strategic point of view for technological portfolio and the group’s vision
the future of companies. of innovation. It also helps them by bringing

out opportunities and provide relevant
Our capacity to assess SMEs and large information for decision making in the sphere
companies in our markets, and to operate of R&D and innovation investment.
remotely in new countries is reinforced by the
services of our International Department, The output of all this work is translated into a
made up of a team exclusively dedicated to periodic report on the client’s R&D tax
analysing, informing and coordinating the incentives situation in each of its subsidiaries
management of the different opportunities and the different opportunities that arise in
with our international clients. In addition to the real time. We also provide an annual
international team, we rely on an extensive management report that allows the clients to
network of ambassadors within FI Group that visualise the return on investment, risks and
channels this information and detects the opportunities according to the structure and
financing needs of our clients outside their type of their R&D projects.
native markets.
For any further information or question, please contact us at: international@fi-group.com
76
Glossary
GERD: Gross domestic spending on R&D is In-house: This means that a taxpayer is carrying out
defined as the total expenditure (current and R&D activities using its own resources (whether
capital) on R&D carried out by all resident they are human or material).
companies, research institutes, university and
Self-assessment: Calculation of one’s own taxable
government laboratories in a country.
liability. It is the exact opposite of the certification

process during which the taxpayer will have to

Corporate Income Tax (CIT): Tax on corporate obtain the approval of a governmental body.
profits is defined as taxes levied on the net profits
(gross income minus allowable tax reliefs) of Sunset date: This usually refers to the last year
enterprises. It also covers taxes levied on the during which the tax incentive is in force.
capital gains of enterprises.
Ex-post: The traditional claiming procedure of the

tax deduction or tax credit, meaning that, eligible
Tax Credit: The incentive directly reduces the
R&D expenses must have been incurred by the
amount of tax you owe, giving you a dollar-for-
claimants before being computed in the calculation
dollar reduction of your tax liability. of their incentive.

Tax Deduction: Fixed amount or percentage that a Ex-ante: The claiming procedure applied to grants
taxpayer can reduce the amount of his or her application and some tax credits, meaning that
income which is subject to taxes. the claimant must deliver an application before
the start of the project. The application is
composed of the description, the business plan
Incremental: This usually refers to the operation of
and future expenses. Once the application is
comparing previous amounts of R&D expenses to
reviewed and approved by the regulatory body,
the ones incurred during the year of the claim.
the company will incur the R&D expenses and
benefit the related tax incentive.
Tax liability: This is the total amount of tax debt
owed by an individual, corporation or other entity Patent Box: Special tax regime used to incentivise
to a taxing authority. research and development by taxing patent
revenues differently from other commercial
Carry-back: The number of years during which the revenues.

portion of a tax deduction or credit not used

Reduced Social Security Contributions: Incentive
during a previous fiscal year can be computed in
based on the reduction of social security
the claim of the current year’s incentive. contributions paid by the claimants for the

personnel exclusively in R&D activities.
Carry forward: The number of years during which
the portion of a tax deduction or credit not used H2020: Current European research and
during the year of the incentive’s claim can be development framework with nearly €80 billion of
computed in the claim of the future fiscal years. funding available from 2014 to 2020.

Horizon Europe: The next European research and

Ceiling: Maximum amount of tax deduction or tax
innovation framework programme to succeed
credit available for each company per year. The
Horizon 2020. Horizon Europe will support
ceiling can also be related to the maximum European partnerships with EU countries, the
amount of eligible R&D expenses. private sector, foundations and other stakeholders.

The aim is to deliver on global challenges and
Refundable: When the total of the tax credits is industrial modernisation through concerted
greater that the tax you owe, the revenue research and innovation efforts. The estimated
department sends you a tax refund for the budget is set at €100 billion and the programme
will be launched on January 1, 2021.
difference.
77
Directory
FI Group Spain Bordeaux Belo Horizonte
Barcelona Rua Bernardo Guimarães, 245 -
CC « Les Grands Hommes » Place
Recinto Industrial de la Colonia des Grands Hommes 1er étage – CS 5º andar - 30140-080
Güell, C/ A, Edifici Filatures 4ª1ª 22029 Recife
08690 – Santa Coloma de Cervelló 33001 – Bordeaux
Rua Ernesto de Paula Santos,
Tel: +34 900 264 044
FI Group Portugal 187 Sala 1901
Madrid Lisboa Boa Viagem – 51021-330
Calle General Lacy, 1 Rua da Alfândega, 108, 1º esq. 1100- FI Group Chile
28045 – Madrid 016 – Lisboa Santiago de Chile
Tel: +351 213536037
Bilbao Fidel Oteiza 1921
Calle Alameda de Urquijo 28, 7º C Porto Oficina 606
48010 – Bilbao Providencia – Santiago de Chile
Rua do Bom Sucesso número 372 – Tel: +56 227 602 270
Valencia 2º Dto, 4150-148 Porto
Tel: +351 220 111 432 FI Group UK
Paseo de la Alameda, 35 bis, 3º
derecha 46023 – Valencia FI Group Germany London
Düsseldorf WeWork The Monument 51
Palma de Mallorca
Eastcheap EC3M 1DT – London
Calle Ada Byron s/n, Berliner Allee 26, 40212 Düsseldorf,
Tel: +44 203 880 2142
Edificio NTIC, 2ºB - Parc Bit 07121 – Germany
Palma de Mallorca FI Group Belgium
FI Group Canada
Sevilla Montréal Bruxelles
Rue des colonies 56
Calle Américo Vespucio s/n (o 5.1.) 417 rue Saint-Pierre, Suite 704,
1000 – Bruxelles
Edificio Cartuja Montréal, QC, H2Y 2M4
Tel: +32 493 30 20 71
Local B-1, 41092 – Sevilla Tel: +1 514 507-8320
Santiago de Compostela FI Group Italy
Toronto
Centro de Negocios. Área Rúa Torino
240 Richmond Street W ON M5V
Varsovia, Bloque 4C, 2ª Planta. 1V6 Corso Valdocco 2, 10122, Torino,
Edificio Área Central – 15707 Italia
Valladolid FI Group Brazil Tel: +39 800 810 001
São Paulo Milano
Plaza Tenerías, 12, 1ºc, 47006
Valladolid Avenida Paulista, 568 Copernico Zuretti - Via Zuretti
6º ao 8º Andar 34 20125 – Milan
FI Group France Jardim Paulista – 01310-000
Paris Tel: +55 11 3031 3292 FI Group Colombia
Espace Bellini - 14 Terrasse Bellini Rio de Janeiro Bogotá
92806 – Puteaux Cedex Calle 54 4-10
Tel: +33 1 80 18 88 00 Praça XV de Novembro, 38 - 8° Bogotá D.C.
Andar Centro Tel: +57 313 421 1919
Nantes 20011-001
3 Mail du Front populaire 44200 – Medellín
Nantes
Curitiba
Coworking Quokka sede patio
Lyon Av. Iguaçu, 2820 bonito Tv. 5a #45 91, El Poblado,
4º andar - Sala 44 Medellín, Antioquia
84 Quai Charles de Gaulle 69006 – Água Verde – 80240-031 Tel: +57 311 7031
Lyon
Manaus FI Group USA
Toulouse
Rua Belo Horizonte, 19 Chicago
65 Rue Carmin 31670 – Labege The Place Business - Sala 414 35 East Wacker Dr., Suite
Nice Adrianópolis – 69057-060 670 Chicago, Illinois 60601
29 Avenue Simone Veil 06200 – Brasília Tel: +1 (630) 258-4981
Nice New York
SNH - Quadra 01 - Área Especial A
La Réunion Bloco A - Sala 314 1375 Broadway, Suite 504,
Asa Norte – 70701-010 New York, NY 10018
Immeuble Mikado - 44 Rue des
Tel: +1 (646) 431 9398
Navigateurs 97434 – Saint-Gilles les Joinville
Bains Miami
Rua Dona Francisca, 8300 Perini
Strasbourg Business Park 78 SW 7th street, 5th floor,
Bloco L - Sala 15 Miami FL, USA
2 Avenue de la Forêt Noire 67000 – Tel: +1 (954) 395 0272
Strasbourg Distrito Industrial – 89219-600
FI Group Singapur
Lille Porto Alegre
541 Orchard Road #09-01 Liat Towers
Le Vendôme Avenida Carlos Gomes 222 - Sala 238881
71 Rue Pierre Mauroy 59800 – Lille 827A Boa Vista – 90480-000
Tel: +65 8727 2690
78

FI Group Tax 2023

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International R&D Tax incentives chart

73 Next Generation EU Funds

Click on the country to be directed to the content.

The amplitude and magnitude of R&D tax support is inherent to each

This compilation is an excellent illustration for the reader of our expertise

This third edition of the international guide covers 20 countries where FI

These special rules allowed greater and

them being refunding of unutilised credits

Additional significant tax credits are available

Corporate income tax rate (2023)

Eligible tax liability

Claiming procedure Compatibility with other tax

the French government’s R&D budget is

GERD as % of GDP (2020)

Corporate income tax return

the French government’s R&D budget is

GERD as % of GDP (2021)

The eligible activities are defined by the

GERD as % of GDP (2021)

Corporate income tax return

SMEs Large Companies

R&D Expenditure Credit is a standalone

Reduces tax liability and creates a refund

The taxed element, currently 19%, is

GERD as % of GDP (2021)

depending on the type of activities

CASH GRANTS AND LOANS GERD as % of GDP (2021)

Corporate income tax rate (2023)

Corporate income tax return

The tax credits can be used to offset a wide

GERD as % of GDP (2021)

Corporate income tax rate (2023)

Corporate income tax return

Claiming procedure Compatibility with other grants

At first incremental, and then hybrid with the

In 2019, SMEs accounted for 89% of R&D tax

In 2018, more than 1,300 Irish companies

GERD as % of GDP (2021)

European State aid approval is required

NEXT GENERATION EU FUNDS GERD as % of GDP (2022)

Corporate income tax rate (2023)

Corporate income tax return

R&D super deduction: Swiss companies

Corporate income tax rate (2023)

Corporate income tax return

Eligible tax liability

The basic structure of the current system of

In 2017, the SR&ED programme provided

Corporate income tax return

Eligible activities Carry-forward

As it was particularly difficult to use for

have a base amount), the Alternative

TAX CREDITS/DEDUCTIONS The US tax credit is considered generous as

GERD as % of GDP (2021)

Corporate income tax rate (2023)

Corporate income tax return

Through this tax incentive, the federal

R&D investment by the private sector, to

To maximise their investments in R&D, the

GERD as % of GDP (2021)

Corporate income tax rate (2023)

Corporate income tax return