Perspectives

Grants and Incentives Program Updates: May 2015

Global developments affecting research and development

​This monthly publication provides updates/summary of the latest global developments affecting research and development, US manufacturing and production activities, employment activities, real estate and capital investment, and sustainability initiatives. More than 50 countries offer specific tax incentives, and this newsletter focuses on identifying and outlining what could be the right incentives for your organization.

EU

Not available to private sector companies

EaSI: Program for Employment and Social Innovation

The Employment and Social Innovation (EaSI) program is a financing instrument at EU level to promote high level of quality and sustainable employment, guaranteeing adequate and decent social protection, combating social exclusion and poverty and improving working conditions.

The call focuses on “Cross-border partnerships and support to cooperation on intra-EU mobility for European Economic Area countries”. Cross-border partnerships must focus primarily on providing services to frontier workers, i.e. EU citizens who reside in one EU country and work in another EU country. The services provided by the cross-border partnerships must contribute to improved mobility in the cross-border regions, the identification of mobility obstacles and the better functioning of cross-border labour markets, thus contributing to economic growth.

Key criteria:

  • Proposals must represent at least two EU neighboring Member States
  • The European Commission may finance up to 90 percent of the total eligible cost of the action
  • Duration is 12 months
  • Applicants: local and regional authorities, training centers, federations unions, agencies chambers, universities

Contact your EU representative

Kees Tuinenbreijer
Senior Manager
+31 6 53 59 8445

France

Available nationally

Temporary super deduction for certain new industrial / research investments

This is an opportunity for companies who are subject to corporate income tax to deduct from their taxable income 40 percent of the original cost (excluding financial expenses) of eligible assets bought or manufactured between April 15, 2015 and April 14, 2016.

Eligible equipment is limited to equipment eligible to the reducing-balance depreciation method and allocated to certain categories of activities (including materials and tools used for scientific and technical research activity). This extra deduction will be spread, on a straight-line basis, over the normal useful life of the assets.

Contact your France representative

Lucille Chabanel
Partner
+33 1 55 61 54 29

Germany

ICT

Software, methods and tools for high performance computing

High performance computing (HPC) is key to many research areas, yet its use implies challenges related to massively scalable architectures, distributed storage or diverse parallel processors. Grants are awarded to interdisciplinary collaborative projects which address these challenges by developing innovative software, tools or methods.

Projects should promote the development of competencies for HPC experts, help to create clear profiles of competence centers and create expert networks.

ICT/healthcare

Medical-technical solutions for a digital healthcare

This scheme funds medical-technical solutions creating added value within the care chain ‘diagnosis–therapy, –aftercare/rehabilitation’ through an increased digitalization of processes. The call focuses on:

  • Digital therapies through therapeutically effective software
  • Digital therapy support systems to create and provide medical relevant data
  • Links between digital therapies and digital therapy support systems
  • Digital production chains to create individualized medical products

Manufacturing/industry 4.0/all industry sectors

Additive manufacturing–Individualized products, complex mass products and innovative materials (ProMat_3D)

Grants for R&D expenses for industry-driven, pre-competitive joint projects on additive manufacturing in the development of products, processes and materials. The call focuses on:

  • Production research–new methods and tools for the additive manufacturing of individualized products and complex mass products
  • Material research–innovative materials for additive manufacturing

Contact your Germany representative

ICT

Oliver Hasse
Senior Manager
+49 (0) 89 29036 7340

Teresa Stahl
Professional
+49 (0) 89 29036 7394

ICT/healthcare

Isabel Antholz
Manager
+49 (0) 40 32080 4910

Teresa Stahl
Professional
+49 (0) 89 29036 7394

Manufacturing/industry 4.0/all industry sectors

Isabel Antholz
Manager
+49 (0) 40 32080 4910

Teresa Stahl
Professional
+49 (0) 89 29036 7394

Netherlands

Priority Sectors

SME Innovation Stimulation Top Sectors (MIT)

The Dutch government and the provinces made a total of € 55 million for the regulation SME Innovation Stimulation Top Sectors (MIT) available in 2015.

The Netherlands has selected a number of Top Sectors in which the business community, knowledge institutes and government work together on innovation.

Top Sectors are the sectors in which the Netherlands excels globally and attracts high government priority. There are nine Top Sectors: Water, Agri-food, Horticulture, High Tech, Energy, Logistics, Creative Industry, Life Sciences and Chemistry.

Thanks to the MIT, SMEs can make use of the facilities available through the Dutch Top Sectors policy: MIT instruments provide funding for e.g. innovation advisory, feasibility projects, R&D cooperation and knowledge vouchers.

Allocation of subsidy of R&D cooperation projects is in accordance to the tender principle and other instruments within the MIT on a first come, first served basis from May 19.

Cash grant limits:

  • Innovation advisory: 50 percent funding of the eligible costs and max. €10,000
  • Feasibility projects: 40 percent funding of the eligible costs and max. €50,000
  • R&D cooperation projects: up to 40 percent funding of the eligible costs and max €150,000
  • Knowledge voucher: 50 percent funding of the eligible costs and max. €3,750

Contact your Netherlands representative

Kees Tuinenbreijer
Senior Manager
+31 6 53 59 8445

Poland

Aviation

InnoLot

Innolot–innovative aviation, is conducted by the National Centre for Research and Development (NCRD). Enterprises and consortia composed of enterprises are eligible to participate in the program.

The following R&D fields are proposed: Innovative Drive System, Innovative Helicopter/Rotorcraft, Innovative Aircraft, Small Unmanned Air Ship and Others.

Contact your Poland representative

Michal Turczyk
Director
+48 12 394 43 38

Portugal

Incentives for technology research and development–companies (joint projects)

Support industrial research and/or experimental development leading to the invention of new products, processes or systems or significant improvements to existing products, processes or systems (joint projects).

Incentives for technology research and development–demonstrators

Support the demonstration of advanced technologies and pilot-lines that are not yet technically/technologically validated for commercial use (individual and joint projects).

Incentives for technology research and development–demonstrators

Support the strengthening of SME’s business capacity through the development of qualification processes for internationalization and organizational innovation.

Contact your Portual representative

Sérgio Paulo Oliveira
Partner
+351210427527

Russia

National subsidies for manufacturing companies

New federal subsidy program for manufacturing companies

The Russian federal government will be committing up to $752 million over the next five years to support the creation of new manufacturing facilities in Russia.

The subsidy is targeted at compensating for part of the interest paid on loans received from Russian banks within the period between 2014 and 2016, provided the loan is aimed at the creation of a new manufacturing facility. The amount of subsidy is determined as follows:

  • For loans in rubles: 0.7 of the key interest rate of the Russian Central bank (which is currently 14 percent) or 0.7 of the amount of the interest paid by the company (depending on the interest rate of loans) or
  • For loans in foreign currency: 0.9 of the amount of the interest paid by the company (but no more than the amount calculated on the basis of the interest rate equal to 4 percent per annum). 

The funding is available subject to a formal selection procedure which is held twice a year: in 2015 applications for the first selection may be submitted between April 13, 2015 and May 12, 2015. The deadline for the second selection will be determined later by the Ministry of Industry and Commerce.

To obtain a subsidy it will be necessary to meet the following requirements:

  • The company is registered in Russia after January 1, 2014
  • The cost of the investment project is from $3 million to $100 million
  • Fixed assets are put in operation after January 1, 2014
  • Share of the loan amount is no more than 80 percent of the total cost of the investment project

Priority industry sectors

Direct grants for R&D with universities

The Russian federal government has recently announced a plan to continue supporting companies conducting research and development in strategic areas of science and technology in collaboration with universities. The funding is available following the conclusion of a formal tender procedure. The grant covers 100 percent of the R&D project costs (contracted to the university) and 100 percent of co-funding is needed from the company to launch the production of the results of the research. Preferences may be given to the companies which attract foreign laboratories as a subcontractor. A foreign group may be able to participate as an applicant, which must itself be a Russian legal entity, though the opportunities for receiving funding in such circumstances are limited.

Contact your Russia representative

National subsidies for manufacturing companies

Diana Agarkova
Senior Consultant
+7 (812) 703 7106 x 2595

Direct grants for R&D with universities

Yana Butrimovich
Senior Consultant
+7 (812) 703 71 06

 

Serbia

Manufacturing/internationally marketable services

Attracting (foreign) investments

State grants are offered for both Greenfield and Brownfield projects and may be awarded for financing projects in manufacturing and internationally marketable services sector, with certain exceptions. For example, projects in primary agriculture, production of synthetic fibres, coal and tobacco are not eligible for funding.

Contact your Serbia representative

Attracting (foreign) investments

Srdjan Petrovic
Partner
+381 (0) 11 3812 144

Filip Kovacevic
Manager
+381 (0) 11 3812 164

 

Slovakia

Investment incentives

Investment incentives are provided for projects realized in underdeveloped regions of Slovakia and are aimed primarily at the creation of new jobs in these regions. The type of projects eligible for support are creation or expansion of technological centers, creation or expansion of centers of strategic services, investments in tourist centers and investments in manufacturing business. Higher levels of support are available in regions with higher unemployment rates. The maximum aid intensity is 35 percent of the investment depending on the location of the project.

Contact your Slovakia representative

Martin Rybar
Director
+421258249113

 

 

South Africa

Electricity levy and Section 12L energy efficiency tax incentive

The energy efficiency tax incentive in terms of Section 12L of the Income Tax Act No 58 of 1962 (“the Act”) is calculated as 95 cents per kilowatt hour (“kWh”) and will be extended to cogeneration projects. In order to claim the deduction the tax paying entity must be able to provide a certificate from the South African National Energy Development Institute (“SANEDI”) which confirms the energy efficiency savings submitted complies with the South African National Standard 50010 (“SANS 50010, Measurement and Verification of Energy Savings”) and complies with the published regulations of Section 12L of the Act. Once a carbon tax is implemented, this incentive will be funded through a recycling of revenues from the carbon tax.

Special Economic Zones

The Special Economic Zones (“SEZ”) Act aims to contribute towards the industrialization of the country, economic growth and job creation through improvement of the investment climate, offering appropriate support measures, such as incentives, to investors.

The SEZ Act makes provision for, amongst others:

  • The designation, promotion, development and operation of the SEZs
  • The establishment of the SEZ advisory board and
  • The establishment of the SEZ Fund and appropriate incentives to attract domestic and foreign fixed investments into the zones

The major incentives available to investors locating in a SEZ are listed below:

  • A lower company tax rate of 15 percent in terms of section 12R of Income Tax Act No 58 of 1962 (“the Act”)
  • An accelerated building allowance of 10 percent per annum in terms of the new section 12S of the Act
  • VAT and customs duty relief similar to what is being applied in the current Industrial Development Zones

Critical infrastructure program

The Critical Infrastructure Programme (“CIP”) is a cash grant that covers between 10 percent and 30 percent, capped at R30 million, of the construction costs for the development of critical infrastructure to support strategic investment projects in South Africa. The main aim of the CIP is to support infrastructure that will service new investment projects or the expansion of existing investment projects. The CIP application must be submitted to the DTI and must receive approval from the Minister of Trade and Industry before “breaking” ground.

Section 121 industrial policy projects

The industrial policy project tax incentive supports the National Industrial Policy Framework’s objectives to diversify South Africa’s industrial output, develop a knowledge-based economy and create higher levels of employment.

This incentive supports capital investment and training for both Greenfield and Brownfield investments:

  • Greenfield investment–new industrial projects that utilize only new and unused manufacturing assets
  • Brownfield investments–expansions or upgrades of existing industrial projects

Capital Investment Benefit

The capital investment benefit will depend on the status that a project is awarded upon approval. The benefit is calculated as follows:

Training Benefit

An entity may deduct from the taxable income an allowance equal to the training cost, to a maximum of R36000 per employee, for training provided as a result of the project. The total training allowance for a project with a preferred or qualifying status may not exceed R30 million and R20 million respectively and the training must be provided within 6 years from the date of approval.

Contact your South Africa representative

Newton Cockcroft
Director
+27118065298

 

 

Spain

Investment program for foreign companies in R&D activities

Call to support the implementation of measures which can promote the investment of foreign capital companies with high innovative activities.

The R&D granted activities must be performed in one or more of the following Spanish autonomous communities: Extremadura, Andalucía, Murcia, Castilla la Mancha, Canarias, Galicia and Valencia.

The call can support the following:

  • R&D projects aimed at foreign owned companies who want to establish an R&D center in Spain and
  • R&D projects aimed at foreign owned companies already in Spain but looking to attract new R&D projects to subsidiaries in Spain

Contact your Spain representative

Omar Garzesi
Director
+34 932 30 48 48

Helena Escribano
Senior Associate
 

 

 

United Kingdom

Collaborative research and development

Energy Catalyst–late-stage awards–pre-commercial technology validation

The Energy Catalyst will support businesses and researchers from any sector, who can deliver innovative solutions that contribute to all elements of the energy trilemma:

  • Reducing emissions
  • Improving security of supply and
  • Reducing cost.

Proposals should bring new and innovative solutions and applications into the energy sector and its supply chain.

The adoption and integration of cross-cutting, enabling technologies which are applicable across a range of sectors is encouraged. Examples of these include high-value manufacturing, advanced materials, sensors and information and communication technologies (ICT).

Proposals must be collaborative and business-led. Funding will be expected to cover mainly Experimental Development projects in which a business partner will generally attract up to 25 percent public funding for their project costs (35 percent for SMEs). Industrial Research projects are funded under “Mid-stage awards”–details available on request. Projects are expected to take up to 36 months and the total project costs can be up to £10 million.

Contact your UK representative

Alistair Davies
Director
+44 (0) 2920 264272



 

 

 

USA

New Mexico

New sustainable building credit

Effective tax years beginning 2017 to 2026, a credit is available for the construction in New Mexico of a sustainable building, renovation of an existing building in New Mexico into a sustainable building, or the permanent installation of manufactured housing that is a sustainable building. The credit amount is based on the certification level the building has achieved in the LEED green building rating system and the amount of qualified occupied square footage in the building.

Alabama

Alabama Jobs Act enacted

The Alabama Jobs Act has been enacted, which provides incentives to certain businesses for projects that create any number of new employees, for a qualifying project whose predominant activity includes chemical manufacturing, data centers, engineering, design, research or metal/machining technology, or at least 50 new employees for all other projects. The law authorizes an incentivized company to claim either or both (1) a jobs credit against utility taxes equal to 3 percent of wages paid to eligible employees in the previous year for 10 years, or (2) an investment credit against income taxes, financial institution excise taxes, insurance premium taxes, utility taxes, or some combination of these taxes in an amount of 1.5 percent of the capital investment for 10 years.

Contact your USA representative

Doug Tyler
Tax 
Director
+1 212 436 3703

 

 

 

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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