Grants and Incentives Program Updates: October 2015 | Deloitte US has been added to your bookmarks.
Grants and Incentives Program Updates: October 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.
New private investment law
A new private investment regime, created by Law No.14/15 of 11 August 2015, provides incentives and benefits to qualifying investors, i.e. foreign investment of USD 1 million or more (or its equivalent in national currency) and domestic investment of USD 500,000 or more (or its equivalent in national currency) are either granted by the ministry responsible for the investment area (for private investment proposals, up to USD 10 million) or by the head of government (for private investment proposals of USD 10 million or more). All projects are considered on a case-by-case basis.
The benefits consist of reductions in, or exemptions from, the industrial tax, property transfer tax and investment income tax, with the level of the benefit based on the “score” received by a private investment proposal by reference to specified criteria. The rate reductions/exemptions are available for periods of one to ten years. Benefits will terminate immediately if the investor has benefited from a tax savings equal to or higher than the investment made, upon expiration of the incentive or at the end of the 10-year period.
The government may grant additional benefits for investments of USD 50 million or more that are capable of creating at least 500 or 200 jobs for Angolan citizens in Development Zones A and B, respectively. The additional benefits are available by negotiation under the contractual regime for private investment.
Investors that do not seek to benefit from tax incentives are governed by the general rules applicable to trade and business, as well as the foreign exchange laws. Nevertheless, such investors must be registered under the new private investment regime.
All sectors and industries
R&D tax credit
Austrian companies and foreign companies with a permanent establishment in Austria may apply for an R&D tax credit for R&D activities performed within the country. The credit was increased from 10 percent to 12 percent for eligible expenses as a result of a 2015 tax reform. Application for the R&D credit can be made at the time the corporate income tax return is filed for the relevant year. Unlike many cash grants, it is not necessary to apply for the credit before the project commences. The requirements to qualify for the R&D tax credit are based on requirements in the OECD Frascati Manual.
bio-economy/agriculture/alternative energy/consumer goods
Bio-economy as a social change
Funding of cross-disciplinary research projects that foster social, political and economic change with respect to the following:
- Alternatives to fossil fuels
- Activities counteracting climate change
- Activities for the sustainable use of renewable resources
E-mobility/mechanical and plant engineering/automotive
Compact and robust next generation power electronics
This call focuses on R&D by industry-driven, collaborative projects on next generation compact and robust power electronics that include, in particular, modules and systems based on semiconductor materials with a large band gap, the so-called wide-band gap (WBG) semiconductors silicon carbide (SiC) and gallium nitride (GaN) and highly integrated silicon-based power electronics systems.
Promoting corporate R&D&I (no. GINOP-2.1.1–15)
For SMEs and large companies (either as part of a consortium involving SMEs, or independently, but providing SMEs with a share of the results and profits of the project) implementing R&D&I projects in Hungary outside the Central Hungary area. Projects must be completed within 24 months. Costs of applied research and experimental development also may be eligible.
Grant for large Hungarian companies
Newly introduced funded cash grant for (primarily Hungarian owned) large companies that create jobs. The minimum eligible cost is about €0.3 million. Eligible costs include the purchase of assets, hardware, software and know-how, infrastructural development. Projects must be completed by May 2016 at the latest.
R&D competitiveness and excellence collaboration (No. GINOP-2.2.1–15)
For consortia implementing R&D&I projects in Hungary outside the Central Hungary area. Consortium members may be SMEs, large companies, budgetary institutions or non-profit enterprises, implementing R&D activities or religious institutions. Costs of basic research, applied research and experimental development can be eligible as well as costs of purchase of assets, infrastructure and project management.
Improvement of WBSO/RDA regulation as from 2016
The R&D allowance (income tax and corporate income tax deduction for R&D) and the R&D wage tax reduction will be integrated by including all R&D costs and expenditure (including wages) in the wage tax reduction. As a result of this change, companies that do not pay corporate income tax will be able to benefit from the incentive.
Support for industrial R&D carried out by large enterprises – fast track (Sub-measure 1.1.1 of the Smart Growth Operational Program)
Administered by the National Centre for Research and Development (NCR&D), the program supports industrial research and experimental development or experimental development carried out by large enterprises.
One requirement to benefits is that a project must fall within the scope of one of the funding priorities in the area of R&D&I, the “National Smart Specialization.”
Eligible costs include remuneration, costs of outsourcing (up to 50 percent), the purchase of R&D infrastructure and equipment (depreciation and lease), intangible assets, land and buildings, other operational costs, and indirect costs (up to 17 percent).
The NCR&D will make a decision on a grant request within 90 days of the call closing.
Application projects (Sub-measure 4.1.4 of the Smart Growth Operational Program)
Program managed by National Centre for Research and Development (NCR&D) support projects conducted by research consortia consisting of at least one research unit and one entrepreneur, but no more than five entities, that intend to conduct R&D or only development activities. The project should involve product or process innovation and fall within the scope of one of the “National Smart Specializations.” The planned
results of the project must have the characteristics of disruptive innovation and be novel.
Eligible costs include remuneration, costs of outsourcing (up to 50 percent of eligible costs incurred by a particularentrepreneur in the project), R&D infrastructure and equipment (depreciation and lease), intangible assets, land and buildings (up to 10 percent of eligible costs), other operational costs, and indirect costs (up to 17 percent of direct costs excluding costs of outsourcing).
Announcement of the evaluation results will be made within 90 days of the call closing.
Rural development program 2014–2020 (Measure 3.2 Investment in Agricultural Exploration)
Support investments in agricultural exploration that have the following objectives: (i) enhancing the viability and competitiveness of agricultural exploration, promoting innovation, training, organizational training, and resizing companies; or (ii) reserving and improving the environment, ensuring compatibility of investments with environmental standards and health and safety at work.
Rural Development Program 2014–2020 (Measure 3.3 Investment in the Processing and Marketing of Agricultural Products)
Support investment projects that have the following objectives: (i) promoting the expansion and renovation of agro-industrial production structures, enhancing value creation, innovation, quality, and food safety, the production of tradable goods and internationalization of the sector; or (ii) preserving and improving the environment, ensuring compatibility of investments with environmental standards and health and safety at work.
The investment projects must be carried out by entities that operate within the secondary agricultural sector and contribute to the development of production or to the added value of agricultural production.
Incentives for Technology Research and Development (contractual regime)
Support technology research and development (TR&D) projects promoted by companies if the following conditions are fulfilled: (i) the TR&D project has an eligible investment amount of at least €10 million and is of special interest to the Portuguese economy; (ii) the TR&D project is recognized by the Portuguese government as having strategic interest (irrespective of the eligible investment amount).
This European funding program is dedicated to support R&D-performing SMEs in any technological area that aims to develop an innovative new product, process or service that will be rapidly commercialized.
Applications must include at least two independent partners established in at least two of the 34 participating Eurostars countries.
Projects must be completed in 36 months or less and market introduction of the project results should be within 24 months of the completion of the project.
Innovate UK will fund up to 60 percent of eligible costs up to a maximum grant of €360,000 (on eligible project partner costs of €600,000 per UK partner). A SME must have been registered as a UK company for 12 months, have PAYE staff and been trading for 12 months before the application deadline.
Innovate UK – materials for demanding environments
Support for technical feasibility studies to demonstrate radical or novel improvements in the performance of materials in demanding, extreme and/or aggressive environments.
The scope of this competition does not include materials that can already be embedded into products, the development of new material manufacturing technologies, or process optimization projects.
Projects must be led by a business and be collaborative, involving a partner with a future route to market. Small businesses could receive up to 70 percent of their eligible project costs, medium-sized businesses 60 percent and large businesses 50 percent.
Projects are expected to last 6 to 12 months and range in size from total costs of £100,000 to £150,000, although projects outside this range may be considered.
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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