Corporate investment in innovation and research and development, as well as business investments in the technology sector, find their strongest driver in the SIFIDE programme \u2014 the System of Tax Incentives for Corporate Research and Development.<\/p>\n
The core principle of the system is the possibility for a company to deduct from its Corporate Income Tax (IRC) a significant portion of the expenses incurred with investments that fall within the scope of the programme. As the programme allows for the cumulative application of the base deduction rate and the incremental rate, the tax deduction from taxable profit may reach up to 82.5%.<\/p>\n
From startups to large corporations, the incentive is applicable to companies of any size, with the primary goal of boosting investment levels in innovation and R&D. Due to the incremental rate, in order to fully benefit from the advantages provided by SIFIDE, a company must ensure continuity in its investment in these areas over several years.<\/p>\n
ANI \u2014 the National Innovation Agency \u2014 manages the system, and it is through its online portal that the \u201cCompany Representative\u201d or the designated \u201cApplication Representative\u201d must prepare and submit the entities\u2019 applications for the SIFIDE benefit. It should be noted that applications are submitted annually, always in the calendar year following the one in which the expenses were incurred.<\/p>\n
Three dimensions are covered: investment in fundamental research, industrial research, and experimental development, thereby encompassing the entire innovation cycle \u2014 that is, exploring research results or knowledge acquired in this context, with the aim of achieving substantial improvements to raw materials, products, services, or manufacturing processes.<\/p>\n
The following expenses are considered, for example:<\/p>\n
a) Acquisition of tangible fixed assets, except buildings and land, provided they are created or acquired in new condition and in proportion to their use in research and development activities;<\/p>\n
b) Personnel expenses for employees with a minimum qualification level of Level 4 of the National Qualifications Framework, directly involved in research and development tasks;<\/p>\n
c) Expenses relating to the participation of managers and executives in the management of research and development institutions;<\/p>\n
d) Operating expenses, up to a maximum of 55% of personnel expenses for employees with a minimum qualification level of Level 4 of the National Qualifications Framework, directly involved in research and development tasks, accounted for as remuneration, wages, or salaries for the relevant financial year;<\/p>\n
e) Expenses related to the contracting of research and development activities from public entities or entities with public utility status, provided that such contracting is based on agreements directly related to their intended use, and whose industrial production in the field of research and development is recognised under Article 37-A;<\/p>\n
f) Participation in the capital of research and development institutions and contributions to public or private investment funds that make equity or quasi-equity investments in companies primarily dedicated to research and development;<\/p>\n
g) Costs for registering and maintaining patents;<\/p>\n
h) Expenses for acquiring patents that are predominantly intended for research and development activities;<\/p>\n
i) Expenses related to audits of research and development;<\/p>\n
j) Expenses for demonstration activities resulting from supported research and development projects.<\/p>\n
It should be noted that, if insufficient IRC liability prevents the deduction from being applied, the relevant expenses may be carried forward and deducted within the following 12 tax periods.<\/p>\n
In practice, the incentive may range between the base deduction rate \u2014 32.5% \u2014 and 82.5%, due to the potential combined application of the incremental rate. For SMEs that have not yet completed two financial periods and have not previously benefited from the incremental rate, the base rate is increased by 15%, raising it to 47.5%. As mentioned, continuity in investment in innovation and R&D is essential for the 50% incremental rate to become applicable.<\/p>\n
In practical terms, consider:<\/p>\n
Expenses incurred for R&D in year X = \u20ac150,000
Average expenses incurred in years X-1 and X-2 = \u20ac100,000<\/p>\n
Total tax benefit = Base rate for year X + Incremental rate (on expenses from year X minus the average from X-1 and X-2)
= 32.5% of \u20ac150,000 + 50% of (\u20ac150,000 – \u20ac100,000)
= \u20ac48,750 + \u20ac25,000<\/p>\n
Total tax benefit = \u20ac73,750<\/strong><\/p>\n SIFIDE has been consistently extended by State Budget Laws, and it is likely that this trend will continue and that the programme will keep expanding. As the assessment phase of applications for the previous year will take place next year, if your company carried out R&D in the previous calendar year and meets the criteria for SIFIDE eligibility, you should apply. And if you have any doubts regarding your specific case, do not hesitate to seek legal assistance.<\/p>\nSIFIDE in the Future: Continuity and Opportunities<\/strong><\/h3>\n