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Global investment and innovation incentives updates: December 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

R&D amendments reintroduced into Parliament

The Treasury Laws Amendment (Research and Development Tax Incentive) Bill 2019 was introduced into the Australian parliament on 5 December 2019, as a planned replacement of the bill that lapsed earlier in 2019. The proposed start date for the new bill is 1 July 2019.

Despite the recommendations of a bipartisan Senate Committee in February 2019, the bill remains substantially unchanged from the predecessor bill, with the exception of minor tweaks to the premium tier offsets in the controversial "intensity threshold." The key amendments in the bill include:

  • Recoupling the refundable R&D tax offset rate to 13.5 percent above the corporate tax rate,
  • Capping annual refunds at AUD 4 million, with the exception of defined clinical trials; remaining refundable amounts would be treated as nonrefundable offsets and carried forward,
  • The creation of three-tiered intensity thresholds that could attract "premium" nonrefundable R&D tax offset amounts,
  • A permanent expenditure cap of AUD 150 million, above which no R&D premium would be available,
  • Amendments to Part IVA to specifically include tax offsets,
  • Introduction of a uniform clawback and catch-up deduction regime,
  • Capping decisions on extensions of time to three months, and
  • Allowing the Australian Taxation Office to publish R&D claim details annually.

If enacted as proposed, the intensity threshold amendments could result in worse outcomes for most R&D claimants, and in particular, would discriminate against industries that have high-value production inputs.

Notably, on 12 December 2019, the Small Business and Family Enterprise Ombudsman released a report on the administrative aspects of the current R&D tax incentive program. The report acknowledges the value of the program for Australian business and identifies certain regulatory approaches that have negatively impacted claimants.

Articles on the bill and the report are posted on tax@hand.

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

Belgium

Flemish policy note on economy, science, and innovation

The new Flemish Minister of Economy, Innovation, Work, Social Economy, and Agriculture has released a new policy note that sets out the priorities of the Flemish government for the next five years (2019–2024) and describes preliminary budget insights. In general, an increase in the overall budget for R&D of €250 million by 2024 is expected.

One of the minister's priorities is to enhance digitization and stimulate the transition towards Industry 4.0. €15 million will be awarded annually to Flemish companies for the implementation of artificial intelligence (AI) on their premises, and another €9 million annually will be available for research and the dissemination of knowledge about cybersecurity. The focus will be on innovation for climate-neutral solutions in the industry and the circular economy. Several projects and funding programs to guide the "green transformation" will run in the next five years (such as Moonshot, Energyville, and activation of circular economy programs at clusters, etc.).

Scheme budget n/a
Type of incentive n/a 
Deadline n/a

Contact your Belgian representative

Renaud Hendricé,
partner
+32 2 600 67 21

European Union

Erasmus+ 2020 call

Erasmus+ is the EU program in the fields of education, training, youth, and sport for the period 2014–2020. The program supports three types of key actions:

  • Mobility projects in the field of education and training,
  • Strategic partnerships in the field of education and training, and
  • Support for policy reform.

The budget for the program in 2020 is increased by 12 percent compared to 2019 (€3.2 billion). Actions related to education and training will be the focus for the 2020 work program, taking 90 percent of the financial envelope (€2.9 billion).

Scheme budget €3.2 billion
Type of incentive European funding
Deadline Most applications will end by April 2020

Contact your European Union representative

Renaud Hendricé,
partner
+32 2 600 67 21

Germany

AI as a key technology for the vehicle of the future

This German funding program aims at determining and realizing the potential of AI for automotive applications, especially in the following fields of research and topics:

  • AI for automated driving, such as improved detection and interpretation of the environment, navigation, optimized driving by communication or cooperation, novel test procedures for validation, and release (this area exclusively addresses applications in urban and rural road traffic with the goal of achieving a technology readiness level between three and five),
  • AI methods for optimized operation, such as vehicle monitoring and energy management, condition monitoring, and proactive and intelligent navigation, and
  • AI methods for vehicle development, such as big data-driven "next best action" within the development process, including simulation.

Proof of the development results is mandatory to obtain the cash grant.

Eligible participants Commercial enterprises, universities, and research institutions established in Germany
Scheme budget Up to 50 percent of qualifying costs for commercial enterprises
Type of incentive Nonrefundable cash grant
Deadline 29 February 2020 to 31 August 2020

Demonstration of innovative, connected security solutions (SiFoLIFE)

This call addresses innovative R&D projects in Germany that demonstrate the practical use of new security solutions at the municipality level and prepare a subsequent technology transfer. This program consists of two phases:

  • Concept phase: The objective of this phase is the elaboration of a strategy concept, which identifies innovative security solutions from R&D and converts them into an integrated security approach, and
  • Implementation phase: Up to five joint demonstration projects between municipalities and other partners with the goal of demonstrating the viability of the integrated security approach by a large-scale test operation of combined technical and organizational security solutions.
Eligible participants

Municipalities, public enterprises (especially operators of critical infrastructure), commercial enterprises, research and scientific institutions, and universities in Germany
Scheme budget Concept phase:
– Up to 50 percent of qualifying costs incurred by commercial enterprises

– SMEs are eligible for an additional bonus

– Up to 100 percent of qualifying costs for noncommercial research institutions, universities, and federal and state authorities

– A maximum of €250,000 per project over an 18-month period

Implementation phase:
– Up to 25 percent of qualifying costs incurred by commercial enterprises

– Up to 15 percent of qualifying costs where there is cooperation with SMEs or R&D institutions

– SMEs are eligible for an additional bonus

– Up to 100 percent of qualifying costs for noncommercial research institutions, universities, and federal and state authorities

– The above benefits are based on the GBER.
Type of incentive Nonrefundable cash grant
Deadline 11 May 2020

Contact your German representative

Dr. Sebastian Lange,
service line leader
+49 151 18293720

Poland

Sector program: GAMEIN (Measure 1.2 of Smart Growth Operational Program)

The GAMEIN program, administered by Poland's National Centre for Research and Development (NCRD), is designed to support industrial research and/or experimental development of the video game industry. Cash grants may be provided for projects that are carried out by enterprises or consortia consisting of at least two entrepreneurs or at least one entrepreneur and one scientific unit.

Projects provided through this call can be implemented in any voivodeship, except for Mazowsze.

Scheme budget €3.2 billion
Type of incentive A cash grant ranging from 25 percent to 90 percent for pre-implementation work (such as activities carried out between R&D and the implementation of the developed solution on the market) up to €200,000 of qualifying costs, depending on the type of activities, company size, cooperation with third parties, and dissemination of project results.

The grant is available to cover the following expenditure:

– Remuneration of employees engaged in R&D,

– Subcontracting costs (up to 60 percent of R&D costs and 70 percent of pre-implementation activity costs),

– Depreciation of fixed and intangible assets used in R&D (equipment, buildings, and land),

– Other operating costs (such as materials and raw materials, elements permanently installed in the prototype, promotion, audit), and

– Indirect costs (a lump sum amount up to 25 percent of direct costs, excluding subcontracting costs).

The grant is available for the following areas:

– Video game design,

– Platforms, engines, and processing techniques,

– Application of AI,

– New tools and interaction mechanisms,

– Digital distribution and multiplayer online games, and

– Tools and knowledge supporting the game development process.

The minimum and maximum amount of qualifying costs are €93,000 and €4.7 million, respectively.
Deadline 16 March 2020


Fast Track (Submeasure 1.1.1 of Smart Growth Operational Program) – Low-emission heating technologies

Administered by Poland's NCRD, this program supports industrial research and/or experimental development that can be supplemented by pre-implementation work and carried out by enterprises or consortia consisting of at least two entrepreneurs or at least one entrepreneur and one scientific unit.

Projects provided through this track can be implemented in any voivodeship.

Thematic path: Low-emission heating technologies
Scheme budget €46.5 million
Type of incentive Cash grant of 25 percent to 90 percent for pre-implementation work up to €200,000 of qualifying costs, depending on the type of activities, company size, cooperation with third parties, and dissemination of project results.

The grant can be used for the following expenditure:

– Remuneration of employees involved in R&D,

– Subcontracting (up to 70 percent of R&D costs and pre-implementation work costs),

– Depreciation of fixed and intangible assets used in R&D (such as equipment, buildings and land),

– Other operating costs (such as materials and raw materials, elements permanently installed in the prototype, promotion, audits), and

– Indirect costs (a lump sum amount up to 25 percent of direct costs, excluding subcontracting costs).

The grant may be used for expenses incurred with respect to the following:

– Design and installation of heat pumps,

– Heat pumps in industry and heating,

– Boiler construction,

– Automation and control systems for boilers,

– Individual construction of space heaters,

– Equipment for heating, and

– Photovoltaics.

The minimum and maximum amount of qualifying costs are €93,000 and €50 million, respectively.
Deadline 31 March 2020


Fast Track (Smart Growth Operational Program)

This program, administered by Poland's NCRD, is designed to support industrial research and/or experimental development, which can be supplemented by pre-implementation work, resulting in the development of an innovative solution (product, process) for a business activity carried out by enterprises or consortia consisting of at least two entrepreneurs or at least one entrepreneur and one scientific unit.

Projects provided through this program can be implemented in any voivodeship, except for Mazowieckie.

The project must be in compliance with the National Smart Specializations.

Scheme budget €270 million
Type of incentive Cash grant of 25 percent to 90 percent for pre-implementation work (up to €200,000) of qualifying costs depending on the type of activities, company size, cooperation with third parties, and dissemination of project results.

The grant can be used for the following expenditure:

– Remuneration of employees involved in R&D,

– Subcontracting costs (up to 70 percent of R&D costs and pre-implementation work costs),

– Depreciation of fixed and intangible assets used in R&D (equipment, buildings, and land),

– Other operating costs (such as materials and raw materials, permanently installed elements in the prototype, promotion, audit), and

– Indirect costs (a lump sum amount up to 25 percent of direct costs, excluding subcontracting costs).

The minimum and maximum of qualifying costs are as follows:

– Projects implemented independently by SMEs: €234,000 and €50 million

– Other projects: €467,000 and €50 million
Deadline – 7 February–3 April 2020 for large enterprises and consortia (also with SMEs and scientific units)
– 4 April–1 June 2020 for SMEs (also in consortium with scientific units)


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

This program, administered by Poland's Ministry of Investment and Economic Development, supports the creation or development of R&D centers. To participate, an enterprise must submit a research agenda that includes a description of R&D activities planned to be conducted with purchased infrastructure, and the project must comply with the National Smart Specializations.

Scheme budget €81.7 million
Type of incentive The incentive is in the form of a cash grant that can range from 10 percent to 70 percent of qualifying costs, depending on the location of the project and the size of the enterprise (according to the regional aid map).

The grant may be used for the following costs:

– R&D infrastructure and equipment,

– Construction work and materials,

– Intangible assets, and

– A real estate lease or the purchase of real estate (up to 10 percent eligible costs)

The grant will range from 25 percent to 45 percent of costs of acquiring technical knowledge and advisory services: From 25 percent to 45 percent, depending on the size of the enterprise, and for materials and products used for R&D activities, from 25 percent to 45 percent, also depending on the size of the enterprise.

The minimum and maximum costs are €467,000 and €50 million, respectively.
Deadline 11 May 2020
Additional information n/a


Research to market (Sub-measure 3.2.1 of Smart Growth Operational Program)

This program, administered by Poland's Agency for Enterprise Development, supports the implementation of new/significantly improved products and/or technological processes developed as a result of R&D activities.

The program, which provides for a cash grant, is available only for micro, small, and medium-sized enterprises. An application must be submitted that contains details of new features and functionalities of innovation (at least at the national level), and the project must comply with the National Smart Specializations.

Scheme budget General call for proposals: €116.8 million

Call for proposals for medium-sized cities: €35 million
Type of incentive Cash grant that can be used for the following:

– Investment expenditure for construction and materials, tangible and intangible assets, and real estate leases/purchases of real estate: From 20 percent to 70 percent of expenditure, depending on the location of the project and the size of the enterprise (according to the regional aid map),

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

– Consulting services: Up to 50 percent and a maximum of €116,000).

The minimum and maximum costs are €232,500 and €50 million, respectively.
Deadline 23 April 2020
Additional information n/a


Investments of importance for Polish economy, 2011–2030 (government subsidy)

This program, administrated by the Polish Investment and Trade Agency, supports investment projects focused on the growth of innovation and competitiveness of the domestic economy. A subsidy will be granted based on a bilateral agreement between the Ministry of Economy and the investor. Investment support will be provided for certain costs for creating new jobs and the cost of investments and may be increased if training is offered to employees.

Scheme budget €0.6 billion
Type of incentive A cash grant is available for new investments (CAPEX), such as strategic production investment, investment in innovation, and R&D investment, ranging from 10 percent to 20 percent of qualifying costs, depending on investment location and type of project. Expenditure for investment costs in both tangible and intangible assets qualifies.

A cash grant also is available for the creation of new jobs regarding investment in centers for advanced business services and business process excellence and R&D investment, with the amount ranging from €28,000 to €47,000 per work place, depending on the location of the investment and the type of project. The grant is available for the costs of creating new jobs.
Deadline Ongoing (subsidies will be granted until the end of 2025)

Contact your Poland representative

Dominika Alicka,
senior manager
+48 881 95 0969

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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