Global investment and innovation incentives updates: March 2017

European Union

LIFE Programme

The LIFE programme, one of the financial instruments supporting environmental, nature conservation and climate action projects throughout the EU, has more than EUR 390 million available in 2017 for funding projects to be undertaken by companies in the EU that involve the following:

• Prevention or reduction of air or noise pollution,
• Reduction of greenhouse gases,
• Renewable energy technologies or energy efficiency,
• Improvements in the energy or environmental performance of products or services,
• Development of innovative clean technologies,
• Methods for monitoring and managing the environmental impact of the company’s activities,
• Managing environmental risks, such as rehabilitation or decontamination,
• Integrated waste management and prevention, resource use, waste treatment or recycling, and
• River basin management, water scarcity, water/waste water management, or improving groundwater quality.
  

Applications may be submitted by a legal entity that has its registered office in the EU, and the grants can be up to EUR 4 million for individual projects, although they typically amount to between EUR 1 and EUR 3 million. The maximum rate of co-financing (support) is 60 percent for the 2014-2017 period and claims can be made on a unilateral basis without any need for collaboration, although collaborative projects are welcome.

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Czech Republic

EPSILON

The Epsilon programme, announced by the Technology Agency, focuses primarily on improving the position of Czech industry by providing support to projects in applied research and experimental development whose results will have a high potential for being quickly applied to new products, production processes and services. The maximum level of support per project is 60 percent of the total eligible costs. Subsidy recipients include small and medium-sized enterprises (SMEs), and large entities and research institutions.

Removing hazardous old environmental burdens

The new call, as part of the “Environment” Operation Programme announced by the Ministry of the Environment and the State Environmental Fund, will help reduce the number of hazardous old environmental burdens in the Czech Republic. Applicants are to be awarded a total of CZK 400 million (approximately EUR 15 million), with CZK 20 million designated for the performance of research and risk analysis and CZK 380 million for remediation.

Grant applications primarily may be submitted by businesses that provide services relating to the disposal of environmental burdens, as well as by municipalities, regions aThe new call, as part of the “Environment” Operation Programme announced by the Ministry of the Environment and the State Environmental Fund, will help reduce the number of hazardous old environmental burdens in the Czech Republic. Applicants are to be awarded a total of CZK 400 million (approximately EUR 15 million), with CZK 20 million designated for the performance of research and risk analysis and CZK 380 million for remediation.

Grant applications primarily may be submitted by businesses that provide services relating to the disposal of environmental burdens, as well as by municipalities, regions and charitable trusts. Grants for all supported measures may amount to a maximum of 85 percent of eligible costs.

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Germany

Nanoscale carbon materials: From basic research to industrial implementation

R&D and demonstration projects with the following goals may request funding:

• Application-oriented development of nanoscale carbon materials, 
• Improving the production process and process understanding,
• Further development of the processing chain,
• Clarification of aspects of work safety or environmental protection in the processing of nanoscale carbon-materials, and
• Support network and transfer projects for organizational and content-related tasks.
  

Pilot action: SME-NetC

R&D and demonstration projects led by SMEs and innovation networks of SMEs focusing on one of the following topics may receive funding:

• Expanding the innovation base of SMEs and increasing focus on innovation, especially in all fields of process digitalization (open to all technologies), and
• Increasing global competitiveness and changes to current business models by platform implementation.

Non-technological innovations, such as the development of new business models, also are eligible.

The aim of the innovation networks should be to support SMEs that lack experience with public funding (e.g. that have not yet applied for funding) or that have never received European or German project funding.

The innovation networks also should aim to support the increasing cooperation of SMEs with research institutions and universities.

Innovative Recycling—Sectoral R&D projects (Measure 1.2 of Smart Growth Operational Programme)

Administered by the NCR&D, the innovative recycling programme (dedicated to the recycling sector) supports industrial research and experimental development or experimental development carried out by enterprises or consortia consisting of at least two entrepreneurs.

A grant is available for projects dealing with:

• Non-ferrorus metal production waste,
• Hard coal extraction waste,
• Glass, ceramics, and construction material waste, and
• Wood waste.
  

InnoNeuroPharm—Sectoral R&D projects (Measure 1.2 of Smart Growth Operational Programme)

Administered by the NCR&D, the InnoNeuroPharm program (dedicated to the pharmaceutical and neuro-medical sectors) supports industrial research and experimental development, or experimental development carried out by enterprises or consortia consisting of at least two entrepreneurs.

A grant is available for projects in the following areas:

• Medical products and their manufacturing technologies,
• Diagnostic methods and new biomarkers,
• Rehabilitation methods in neuro-medicine, and
• Tools supporting research on medicinal products.

WoodInn—Sectoral R&D projects (Measure 1.2 of Smart Growth Operational Programme)

Administered by the NCR&D, the WoodInn project (dedicated to the forestry and furniture sectors) supports industrial research and experimental development, or experimental development carried out by enterprises or consortia consisting of at least two entrepreneurs.

A grant is available for projects in the following areas:

• New raw materials and materials for the forest-based and furniture sectors,
• Technologies for the sourcing, storing, processing, cutting, and treatment of wood, and
• New uses for wood and wood-based materials.

Support for implementation of R&D results in the field of electro mobility (Sub-measure 3.2.1 of Smart Growth Operational Programme)

Administered by the Polish Agency for Enterprise Development, this program supports the implementation of R&D results in the field of electro mobility. Projects may include implementation of the results of R&D carried out by the applicant itself or commissioned to a third party that leads to the introduction of new or significantly improved products or services.

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Portugal

Incentives for technology R&D (Individual demonstration projects)

Support for Individual Demonstration Projects is available to companies carrying out projects relating to advanced technologies and pilot lines that have an investment amount of at least EUR 150,000.

Incentives for technology R&D (Co-promotion Demonstration Projects)

Support for Co-promotion Demonstration Projects (CDP) is available to companies and not-for-profit organizations under the R&I system (universities, research institutes, technology transfer agencies, innovation intermediaries, research-oriented physical, or virtual collaborative entities). The CDP must involve advanced technologies and pilot lines and have an investment amount of at least EUR 150,000.

Incentives for Technology R&D (Co-promotion Projects)

Support for Co-promotion Projects is available to companies and not-for-profit organizations under the R&I system that undertake projects led by a company and are within the priority areas of the national and/or R&I strategy for a smart specialization and have an investment amount of at least EUR 150,000.

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Enhancements for Global Trader Programme (GTP)

Singapore’s GTP grants a preferential tax rate of 5 percent or 10 percent on qualifying trading income derived by approved global trading companies from qualifying transactions (including income from physical trading, brokering of physical trades, and derivative trading income). An application must be submitted and approved by International Enterprise Singapore.

The GTP currently requires qualifying transactions to be carried out with other qualifying counterparties (e.g. with parties outside Singapore or another GTP company). The GTP company cannot enjoy the preferential tax treatment on any margin relating to value adding activities undertaken. The government announced in Budget 2017 that the counterparty restriction will be removed, and a preferential tax rate will be granted to approved global trading companies on income derived from qualifying transactions with any counterparty.

A preferential tax rate also will apply to the following types of income:

• Physical trading income derived from transactions in which the commodity is purchased for purposes of consumption in Singapore or for the supply of fuel to aircraft/vessels within Singapore, and
• Physical trading income attributable to storage in Singapore or any activity carried out in Singapore that adds value to the commodity by physical alteration, addition, or improvement.

The substantive requirements to qualify are likely to increase for new/renewed incentive awards. International Enterprise Singapore will release more details by May 2017.

Refining the Finance and Treasury Centre scheme

The Finance and Treasury Centre (FTC) tax incentive currently provides a preferential corporate tax rate of 8 percent on fees, interest, and gains from qualifying services and activities for a specified period of time. It also provides for a withholding tax exemption on interest payments on loans granted by nonresident banks, as well as loans and deposits from nonresident approved network companies, for FTC activities. Examples include foreign exchange transactions with banks outside Singapore or with persons who are not residents of and do not have a permanent establishment in Singapore, or with licensed banks or approved merchant banks.

As part of the Budget 2017, the government indicated its intention to streamline the requirements relating to qualifying counterparties for certain transactions to reduce the administrative and compliance burden on approved FTCs. The Singapore Economic Development Board will release more details by May 2017.

Safe Harbour rule for R&D project-related payments under cost sharing agreements (CSA)

Taxpayers claiming enhanced tax deductions for R&D expenses for payments made under a CSA are subject to restrictions on certain categories of expenditure. A breakdown of the expenditure covered by the CSA payments needs to be examined in order to exclude the disallowed expenditure. This process often requires substantial effort, and in some instances, a breakdown may not be available or possible. To ease compliance, the government has proposed the introduction of a safe harbour rule as part of Budget 2017.

Taxpayers may opt to claim tax deductions for 75 percent of the payments made under a CSA incurred for qualifying R&D projects instead without the need to provide a breakdown of the expenditure covered by the CSA payments. The Inland Revenue Authority of Singapore will release further details by May 2017.

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Employment Campaign for Period 1 February 2017—31 December 2017

New income tax withholding and social security premium incentives were announced in Legislative Decree No. 687, which was published in the official gazette on 9 February 2017.

The Turkish government will compensate an employer for the social security premiums and income withholding taxes that must be paid for each newly hired employee, as well as for existing employees, up through 31 December 2017. This incentive applies to all businesses in the private sector.

To benefit from the incentive, employees hired on or after 1 February 2017 must (i) be registered with the Turkish unemployment agency; (ii) have been unemployed in the prior three months; and (iii) be employed in addition to the number of persons declared in the monthly social security declaration for December 2016.

Social security premiums must be declared and paid in a timely manner, and the employer must not have any outstanding penalties regarding social security obligations.

The upper limit for this incentive is TRY 773 (the social security premium, plus income tax on minimum wages).

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