R&D&I deductions

The administration makes available for companies, tax incentives and bonuses in quotas in Social Security for the promotion of business innovation. They are mechanisms that allow reducing the tax and social burden of enterprises that carry out activities of research, development and technological innovation and investments in material assets aimed at the protection of the environment. Also available for those companies that transfer the knowledge generated to any third party for commercial exploitation.

Deductions for R&D&i as those relating to investments aimed at the protection of the environment are proportional to the expenditure in each fiscal year. Bonuses are applied directly every month on corporate contributions for contingencies common to the Social Security The first act on the tax burden, the second acts on social charges.

These instruments are of a horizontal nature, and its application is free and general (there is no competitive basis or a predefined budget limit). They are designed to encourage the initiative of the private sector, without conditioning the innovative scope of the company (not limited to certain areas, programmes or initiatives).

Internationally, Spain is considered one of the most generous in the scope of tax incentives to the R&D&i according to the OECD. However, such incentives are slightly used by companies because they find it difficult to know them with the proper depth and apply them safely. This situation occurs especially in SMEs, which represent a 99 % of the market. However, these measures are aimed at the improvement of the business climate and foster the growth of the Spanish companies.

In Vector ARRAM we are experts in the tax treatment of R&D&i and environmental investments as well as other tools of saving. A full process involves the analysis of the different routes of reduction of taxes described in the diagram.

So, it is necessary to carry out an exhaustive study of each company as well as their investments, identifying their needs and all that incentive to which they are entitled.