From January 1, 2024, a new R&D tax incentive that can be converted into cash grant may be introduced.
Currently, businesses conducting research and development activities can deduct the direct costs of basic research, applied research, and experimental development carried out within their own scope of activities from corporate tax as a tax-deductible item.
According to the proposal, in the future, businesses will be able to choose between the tax-deductible item and the R&D tax incentive that can be deducted from corporate tax payable. The expected rate of the tax incentive is 10% of the eligible costs related to R&D activities, with a maximum support of up to 55 million euros for basic research, 35 million euros for industrial research, and 25 million euros for experimental development.
Eligible costs may include:
a) the depreciation of tangible assets used by the research and development team during the R&D project,
b) personnel expenses accounted for the research and development team up to the extent of their employment in the R&D project, excluding indirectly related expenses (including representation, severance pay, wages for exemption periods, and their contributions),
c) the cost of patents used for research and development activities,
d) operational and maintenance costs incurred directly during the research and development project.
According to the rules of the tax incentive, if a company cannot utilize the support as a tax deduction within four tax years, it can request reimbursement by transfer.
It is also recommended for the new R&D tax incentive that, similar to previous ones, companies apply for project qualification through an expert procedure, which can be initiated from September 1, 2023, at the NKFIH instead of the SZTNH.
