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 European Union Research & Development Incentives

Innovative companies are playing key roles in their national economies, with research and development investments made by business being substantial drivers of growth and prosperity for nations. Due to this R&D incentive regimes are being reformed world wide at an unprecedented rate to accommodate and attract highly innovative companies to invest in their economy.

Many countries promote and encourage R&D operations in their economy as part of strategic plans to increase research activities and develop their nation. Countries which offer R&D tax incentives are considered favorable locations for internationally-mobile R&D companies.

The Austrian Government offers a cash back R&D incentive, and maintains a positive attitude towards the R&D regime. Austria offers a 10% subsidy of qualifying R&D and spends approximately 2.81% of GDP on R&D.

The Czech Republic offers R&D activites benefits inclusive of special deducatibility of certain R&D costs. Due to a lack of ownership as a result of R&D, contract companies may also reap the benefits of performing R&D for their customers.

In Lithuania, business and investor needs are considered and highly valued in their business-friendly environment. The R&D Tax Incentive was introduced in 2008, with no government plans to remove it.

The Belgian government supports R&D at all levels, utilising a combination of tax incentives and direct grants. Investment in Belgium is highly attractive with a comprehensive regime for R&D and IP management.

The French Government has made a concerted effort to improve R&D incentives to attract increased R&D activities in France. France utilises the R&D tax credit with a combination of other incentives to increase research activities.

Germany is committed to the Europe 2020 strategy for sustainable growth, by pledging a 3% spend of national GDP on R&D activities. Non-refundable cash grants are available for R&D activities, with the possibility of widening the tax regime.

Greece offers various incentives to encourage R&D and economic growth within the country. The government is not restrictive when it comes to eligibility. All industries may qualify for the super deduction.

Hungary has a well-utilised regime, and is a wide supporter of R&D related activities and investment. Cash grants and tax incentives are available for eligible R&D activities, including infrastructural investments and project costs.

The Irish Government supports the R&D tax regime and acknowledges the important role that it plays in attracting foreign investment. The credit provides a 25% tax benefit for incremental expenditures on qualifying R&D activities incurred in base year.

The Italian Government provides various support of R&D tax incentives and incorporate varied rules. R&D tax credits are available for eligible R&D expenses additional credits for qualified employees and university students.

The Latvian government supports innovation and research by offering a super deduction of 300% to companies performing qualified research activities. Latvia has a broad eligibility criteria and the deduction is available to all industries.

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Croatia offers R&D grants for qualified research projects with the purpose of developing a new or improved product, process of service. These grants range from EUR 25k to EUR 7.5M.

The Dutch Government has a strong emphasis the importance of R&D and its willingness to support such activities in its economy. R&D incentives cover the whole life cycle of a project from development to finalisation.

In Poland R&D incentives are available in the form of tax incentives and cash grants. While still in its early stages many positive changes have been observed to support R&D projects.

During a period of recession and under economic assistance, the Portuguese Government maintains its avid support of R&D activities and related incentive schemes. Key programs available are R&D tax credits and grants.

The Romanian government fully supports R&D incentives to help boost innovation and R&D activities within the country. It offers a variety of incentives including a super deduction, grants and corporate income tax exemptions.

Spanish tax law has always incorporated R&D tax benefits, and has recently modified tax law to enhance R&D incentives. The tax reforms are aimed at stimulating higher investment in Spain by private companies performing R&D.

The Slovakian government has been focused on strengthen the innovation industry throughout the country by offering a variety of R&D tax incentives. These incentives include a super deduction and multiple tax credits.

United Kingdom
The U.K. has extensive support for R&D regimes including R&D tax relief, an R&D tax credit and an R&D allowance for capital expenditure. The UK tax authorities often assist in the claim and audit process to ensure the system is utilised.

Iceland has introduced an ‘innovation bill’ with a number of measures aimed at increasing innovation and research and development within the economy and business. A key focus is the Icelandic startup community, aiming to foster a supportive environment.