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Global investment and innovation incentives updates: August 2019

Global developments benefiting business

This monthly publication provides a summary and updates on the latest global developments in research and development (R&D) credits, grants, and other incentive arrangements. More than 50 countries offer specific incentives and this newsletter focuses on identifying and outlining what could be the right incentives for your organization.

Australia

Decision issued on R&D tax case

Australia’s Full Federal Court issued a decision on 25 July 2019, in which the court rejected a long-standing interpretation of the regulators (AusIndustry) of what constitutes eligible core R&D activities.

The court rejected the narrow interpretation that experimental activities were not eligible core R&D activities because the taxpayer was “testing the application of existing technology at an existing site and nothing more,” and held that, depending on the circumstances, activities that are carried out for the purpose of generating new knowledge with respect to the application of an existing technology to a new site may be eligible core R&D activities.

The Full Federal Court decision still may be appealed.

Scheme budget n/a
Type of incentive R&D tax incentive
Deadline n/a

Contact your Australian representative

Roisin Arkwright,
principal
+61 2 9322 7412

Czech Republic

Digital transformation projects subject of new technology call

The Czech Republic Ministry of Industry and Trade has announced a call under the technology program that will support projects aimed at digital transformation through the acquisition of new machines, technology equipment, and the integration of technologies through autonomous two-way communication into the production process.

The grant is available only to small and medium-sized enterprises (SMEs). The maximum subsidy for a single project will be 45 percent of eligible expenses for small enterprises and 35 percent for medium-sized enterprises.

Scheme budget CZK 1 billion
Type of incentive Cash grant
Deadline 16 December 2019


Renovation projects subject of new real estate call

The Czech Republic Ministry of Industry and Trade has announced a call under the real estate program that will support projects aimed at the renovation of technically dilapidated buildings or the regeneration of brownfields into areas for business activities in the specific CZ NACE codes for tourism or in coal regions.

The grant is available only to SMEs. The maximum subsidy for a single project will be 45 percent of eligible expenses for small enterprises and 35 percent for medium-sized enterprises.

Scheme budget CZK 2 billion
Type of incentive Cash grant
Deadline 31 March 2020

Contact your Czech Republic representative

Luděk Hanáček
partner
+420 606 654 304

Germany

Funding provided under Modernization Fund (mFUND)

The mFUND focuses on systematic research and development (R&D) relating to the innovative use of existing/new data and innovative interconnecting of data, as well as identifying future data needs. Projects must be linked to access, use, or governance of (open) data.

Funding will be provided to cooperative R&D projects that will commence during the period January through June 2020 that relate to one or more of the following: data innovation for waterways, ocean shipping and oceanography; ideas to make municipal data available; data-based solutions for urban micro-mobility in the future; data and software innovation for mobility 4.0; or open data and mobility innovation in rural areas.

Participation by SME/start-ups or communities is mandatory.

Eligible participants Commercial enterprises, research institutions, universities, communities with a permanent establishment in Germany, the EEA (European Economic Area), or Switzerland
Scheme budget Funding ratio:

Up to 50 percent of eligible costs for commercial enterprises

A potential additional bonus for SMEs

Up to 100 percent of eligible costs for non-commercial research institutions

Maximum EUR 3 million per project
Type of incentive Non-refundable cash grant
Deadlines 16 September 2019


ICT for electric mobility: Intelligent applications for mobility, logistics, and energy

This funding measure aims at promoting electric mobility to integrate rural areas and provide barrier-free and affordable transportation with available existing infrastructure. This includes applying digital innovations, such as artificial intelligence, machine learning, and application-based concepts fostering efficient utilization, as well as alternative energy for all modes of transport.

Funding will be provided to “pre-competitive” pilot projects in cooperation with cross-sector partners from science and industry (e.g. automobile manufacturers, energy suppliers, ICT companies, logistics). Projects are expected to result in new business opportunities, subsequent investments and new markets in both Germany and abroad.

The participation of SMEs is mandatory.

Eligible participants Commercial enterprises and research institutions with a permanent establishment in Germany
Scheme budget Funding ratio:

Up to 50 percent of eligible costs for commercial enterprises

A possible additional bonus for SMEs

Up to 100 percent of eligible costs for non-commercial research institutions
Type of incentive Non-refundable cash grant
Deadline 31 October 2021
(rolling submission of applications by 31 March and 31 October annually)

Contact your German representative

Isabel Antholz,
service line leader,
+49 (0)40 32080 4910

Poland

Support for investment in R&D infrastructure of enterprises (Measure 2.1 of the Smart Growth Operational Program)

This program administered by Poland’s Ministry of Investment and Economic Development supports the creation and development of R&D centers.

To qualify for the cash grant, the project must commence within the period stipulated in the application; the enterprise must submit a research agenda (that includes a description of the R&D planned to be carried out with purchased infrastructure); the project must be carried out with SMEs, research institutions, or non-government organizations; and the project must comply with the National Smart Specializations.

Scheme budget EUR 81.4 million
Type of incentive Cash grant for the following:

Investment expenditure: From 10 percent to 70 percent of eligible costs, depending on the location of the project and the size of the enterprise (according to the regional aid map):

R&D infrastructure and equipment,
— Construction work and materials,
— Intangible assets, and
— Instalment payments for real estate lease/purchase of real estate (up to 10 percent eligible costs)

Costs to acquire technical knowledge and advisory services: From 25 percent to 45 percent, depending on the size of the enterprise, and

Materials and products used for R&D activities: From 25 percent to 45 percent, depending on the size of the enterprise (de minimis aid)
Deadline 14 October 2019


Market research (Sub-measure 3.2.1 of the Smart Growth Operational Program)

This program, administered by the Polish Agency for Enterprise Development, supports the implementation of new/significantly improved products in the market or implementation of an innovative technological process as a result of R&D activities.

The program applies only to micro enterprises and SMEs. To qualify for the cash grant, the project must commence within the period stipulated in the application (project implementation must start no later than 12 months from the date the grant application is submitted), the enterprise must justify the profitability and implementation of the project, the project must contain new features and functionalities (at least at the national level), and the project must comply with the National Smart Specializations.

Scheme budget EUR 197.7 million
Type of incentive Cash grant for the following:

Investment expenditure: From 10 percent to 70 percent, depending on the location of the project and the size of the enterprise (according to the regional aid map):

— Construction works and materials,
— Tangible and intangible assets, and
— Instalment payments for real estate lease/purchase of real estate (up to 10 percent of qualifying costs)

Development work: From 35 percent to 45 percent, depending on the size of the enterprise up to a maximum of EUR 105,000), and

Consulting services: Up to 50 percent and a maximum of EUR 116,000)
Deadline 31 October 2019


Cash grant for research/experimental development in Mazovia

This program, administered by the National Centre for Research and Development, supports industrial research and/or experimental development implemented in Mazowieckie Voivodship, resulting in product or process innovation.

To qualify for the grant, the project must commence in line with the schedule stipulated in the application, the project must be completed within 36 months, the project may be carried with another company or research institution, and the project must contain new features and functionalities (at least at the national level).

Scheme budget EUR 140 million
Type of incentive Cash grant 

Intensity may range from 25 percent to 90 percent of eligible costs in the case of de minimis aid for pre-implementation activities (up to EUR 200,000), depending on the type of activities, company size, and dissemination of project results
Deadline 23 September 2019

Contact your Polish representative

Dominika Alicka,
senior manager
+48 8 8195 0969

Portugal

Incentives for technology R&D (joint projects)

Incentives are available for technology R&D projects promoted by a consortium of national entities (companies and R&D entities).

Various conditions must be fulfilled, including the following:

  1. The project must fall within the scope of one of the priority areas of the national R&I strategy for smart specialization,
  2. There must be an investment of at least EUR 150,000, and
  3. The project must include industrial research and/or experimental development activities, leading to the creation of new products, processes, or systems or to the introduction of significant improvements in existing products, processes, or systems.
Scheme budget EUR 45.5 million
Type of incentive Universities and research centers—Cash grant equal to 75 percent of eligible costs, except for investments in the Lisbon region, where the maximum is 50 percent

Enterprises—Cash grant ranging from 25 percent to 85 percent (for projects up to EUR 1 million), except for investments in the Lisbon region, where the maximum rate is 50 percent where the cash grant exceeds EUR 1 million, the amount exceeding that threshold will be split as follows: 75 percent as a cash grant and 25 percent as an interest-free loan.
Deadline 15 November 2019


Incentives for technology R&D (European industrial-scale projects—individual and joint projects)

Incentives are available for technology R&D projects promoted by national entities (companies and R&D entities) that participate in European project consortia.

Various conditions must be fulfilled, including the following:

  1. The project must be approved by an R&D European initiative without receiving European funding (EUREKA network or Eurostars), and
  2. The project must fall within the scope of one of the priority areas of the national R&I strategy for smart specialization.
Scheme budget EUR 11.5 million
Type of incentive Universities and research centers—Cash grant equal to 75 percent of the eligible costs, except for investments in the Lisbon region, where the maximum rate is 50 percent.

Enterprises—Cash grant ranging from 25 percent to 85 percent of eligible costs (for projects up to EUR 1 million), except for investments in the Lisbon region, where the maximum rate is 50 percent.

Where the cash grant exceeds EUR 1 million, the amount exceeding that threshold will be split as follows: 75 percent as a cash grant and 25 percent  as an interest-free loan.
Deadline 18 December 2020 (last phase)


Incentives for business innovation and entrepreneurship

Incentives are available for projects in all economic activities, particularly those aimed at the production of tradable and exportable goods and services.

Various conditions must be fulfilled to benefit from the incentives, including the following:

  1. The project must strengthen investment in innovative activities,
  2. It must contribute to the internationalization of the Portuguese economy, the creation of qualified employment, and have a spill-over effect on SMEs,
  3. It must promote qualified and creative entrepreneurship, and
  4. The project must be carried out in Lisbon, Alentejo, or the Algarve regions.
Scheme budget EUR 42.5 million
Type of incentive Non-SMEs—Cash grant ranging from 15 percent to 25 percent of eligible costs, depending on the project location. The cash grant can be reversed if the enterprise fails to comply with specific targets in the grant agreement

SMEs—Incentive base rate ranging from 15 percent to 80 percent of eligible costs (depending on the size of the enterprise, the size of the project, and the location). The incentive is split as follows: 50 percent as a cash grant (unless the enterprise fails to comply with specific targets in the grant agreement) and 50 percent as an interest-free loan
Deadline 30 August 2019


Incentives for technology R&D (demonstration—SME instrument Phase 2)

Incentives are available for technology R&D demonstration projects promoted by national SMEs.

Various conditions must be fulfilled, including the following:

  1. The project must be approved by the SME Instrument Phase 2 (Seal of Excellence) and not have any European funding,
  2. The project must fall within the scope of one of the priority areas of the national R&I strategy for smart specialization,
  3. The project must include a public demonstration session of the new product/process/system in a real environment, and
  4. The project must include and carry out a dissemination plan regarding entities potentially interested in the results obtained.
Scheme budget EUR 18.7 million
Type of incentive Cash grant ranging from 25 percent to 45 percent of eligible costs (depending on the size of the enterprise). The base support rate may increase up to 85 percent (depending on the type of activities), except for projects carried out in the Lisbon region, where the maximum support rate is 50 percent

Where the cash grant exceeds EUR 1 million, the amount exceeding that threshold will be split as follows: 75 percent as a cash grant and 25 percent as an interest-free loan
Deadline 31 January 2020


Incentives for technology R&D (intellectual and industrial property protection)

A cash grant is available for technology R&D projects promoted by national enterprises that aim at the registration of industrial property rights such as patents, utility models, and industrial designs.

Various conditions must be fulfilled, including the following:

  1. The project must fall within the scope one of the priority areas of the national R&I strategy for smart specialization, and
  2. The results to be protected must be obtained through a project approved by national support schemes (Portugal 2020 or QREN)
Scheme budget EUR 2.725 million
Type of incentive Cash grant equal to 50 percent of eligible costs. For investments promoted by non-SMEs, the cash grant is subject to the de minimis aid regulation (the cash grant to each non-SME is limited to an overall amount of EUR 200,000 over a three-year period)
Deadline 31 December 2019


Incentives for technology R&D (internationalization—individual projects)

Incentives are available for companies that intend to submit proposals to Horizon 2020.

Various conditions must be fulfilled, including the following:

  1. The project must fall within the scope one of the priority areas of the national R&I strategy for smart specialization,
  2. The company must present a two-year budget and participation plan on Horizon 2020, and
  3. The applicant must justify the relevance and rationality of the R&D participation plan and that it is aligned with the company’s research and innovation strategy.
Scheme budget EUR 3.625 million
Type of incentive Cash grant equal to 50 percent of the eligible costs. For investments promoted by non-SMEs, the cash grant is subject to the de minimis aid regulation (the cash grant to each non-SME is limited to an overall amount of EUR 200,000 over a three-year period)
Deadline 31 December 2019

Contact your Portugal representative

Sérgio Oliveira,
partner,
+351 210 427 527

Thailand

Investment in grassroots economy promoted

The Thailand Board of Investment (BOI) promotes investment in the grassroots economy for existing promoted companies to be eligible for tax holidays if they support local organizations in agribusiness and the agro-processing industry, light industry, and community tourism.

The minimum investment must be at least THB 1 million (excluding the cost of land and working capital), and the project must provide at least THB 200,000 in support to local organizations, cooperatives, or community enterprises.

Scheme budget N/A
Type of incentive Three-year corporate income tax exemption, capped at 120 percent of the actual investment made by the promoted company in the project, excluding the cost of land and working capital
Deadline Application must be submitted by 30 December 2020


Investment in large-scale projects promoted

The Thailand BOI promotes investment in large-scale projects in targeted industries by providing qualifying project investors a tax holiday followed by a 50 percent reduction in the corporate income tax. Projects can be located anywhere in Thailand, except Bangkok.

The minimum investment in targeted activities is THB 1 billion (excluding the cost of land and working capital). Projects must involve eligible activities in A1, A2, or A3 (BOI categorizations for investment promotion) and the investor must already be entitled to a corporate income tax exemption not exceeding eight years.

Scheme budget N/A
Type of incentive 50 percent reduction of the corporate income tax liability for three years starting from the end of the eight-year corporate income tax exemption period
Deadline Application must be submitted to the BOI during the period 19 November 2018 to 30 December 2019

Contact your Thailand representative

Anthony Visate Loh,
lead partner,
+66 (0) 2034 0112

Sutthika Ruchupan,
senior manager,
+66 (0) 2034 0000
Ext. 11473

For more information

For more information on any of the programs listed above, please contact the in-country representative or your usual contact.

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Global investment and innovation incentives updates: Global developments affecting research and development

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