In early 2015, Slovakia introduced a new type of tax incentive aimed at supporting companies conducting corporate R&D (most common is development of new or substantially improved products, services, technologies and processes). This regime represents a transparent, fair and administratively less demanding form of fostering corporate R&D. Similar regimes have been in use for years in the world's most advanced economies.
The amount of additional deduction increased to 100% from 1 January 2018.
In practice, eligible expenses can be deducted from the tax base twice. First as a normal tax-deductible expense and second as an additional super-deduction. This leads to net tax savings amounting to 21% of eligible R&D costs (example: each EUR 1,000 of actual R&D expenses result in tax savings of EUR 210).
Super-deductions can be utilized by any company, which in the relevant tax period incurs expenses directly related to R&D projects. In case of tax losses, the super-deduction may be transferred to the next tax period (up to maximum of four subsequent years).
Utilization of super-deductions is not subject to any approvals by state authorities. Provided all legal conditions are met, there is a legal entitlement to claim these additional deductions. On the other hand, the company has the obligation to prepare and sign a written R&D project prior to its start. In addition, the taxpayer must ensure separate recordkeeping of eligible costs.
The most common types of eligible costs are as follows: labour costs of R&D personnel, depreciation of buildings, machinery and equipment, overheads, software licenses, certification costs, etc.
Deloitte is able to provide advisory services throughout the entire utilization process - from identifying eligible activities to drafting of documentation and ex post project evaluation.
- Identification of eligible R&D activities
- Identification of eligible costs
- Assessing the taxpayer's eligibility
- Calculation of potential tax savings
- Assistance with preparation of obligatory documentation
- Assistance with setting up of a costs recordkeeping system
- Advice on internal processes related to super-deductions
- Assistance with applying super-deductions in respective tax returns
- Advice on communication with state authorities, including counseling during tax audits
Dedicated R&D team:
Our dedicated team of R&D consultants has robust practical experience with the entire utilization process. Since 2015, Deloitte’s experts have advised numerous companies from different sectors (manufacturing, IT, financial sector). Among our clients are large as well as small and medium-sized businesses. Additionally, our team can build on more than 10 years of experience from Deloitte Czech Republic, where the same super-deduction regime has been in place since 2005.