All you need to know about R&D bonuses

All you need to know about R&D bonuses

Today we are going to talk about one of the most immediate and powerful tax incentives that exist today: Social Security bonuses for research personnel. These bonuses in the contributions paid by the company to the Social Security allow a reduction of 40% in the contributions to the social security contributions for each subsidized worker. You must have been curious and want to know more. Donā€™t worry! In todayā€™s article we explain everything you need to know about R&D bonuses.

What are the requirements to qualify for this bonus?

Unfortunately, not all workers can be rewarded in this type of incentive, but your employees must meet several conditions:
  • To beincluded in groups 1, 2, 3 and 4and to contribute to the General Social Security System in Spain.
  • Have a minimum of 85% of their work dedicated to R&D.
  • Develop R&D activities as defined in Article 35 of the Corporation Tax Act.

Advantages of the R&D bonus

  • The company automatically decreases the expenditure of personnel dedicated to tasks of R&D, taking into account that turnkey developments, under order of clients and ICT projects developed to customers have rights to the bonus equally.
  • This tax incentive is compatible with tax deductions for R&D, only in case of having the spanish “Innovative SME Seal”
  • In other organizations that do not have this seal, both incentives may apply as long as they do not apply to the same developer staff.

What is the procedure for applying this bonus?

The application procedure varies mainly according to the number of persons and the duration of the bonus. As Upbizor explains, the options are the following:
  • Up to 9 eligible workers you can apply them “internally” as long as you properly document the R&D tasks and activities carried out by each subsidized worker.
  • 10 or more elegible workers and from the third bonus month in a current year, you must start a certification process with an entity accredited by ENAC to provide a binding reasoned report within 6 months of the fiscal year.

What are the profiles of companies that best fit for this type of bonus?

  • Industrial enterprises manufacturing capital goods.
  • Companies dedicated to the development of software tailored to their customers.
  • Companies with an engineering or R&D department that have personnel dedicated to developing solutions or improvements, either for their own products or processes or to obtain solutions or improvements tailored to their customers.
  • Companies with technical staff, preferably industrial engineers, biologists, chemists, pharmacists and other types of qualifications related to science and technology.
  • SMEs with the INNOVATIVE SME label as this bonus is also compatible with the tax deduction for R&D.

Are you an Innovative SME? Find out what advantage you have with this incentive

One of the great advantages of being an Innovative SME is that you do not have to choose the type of incentive associated with the worker who is engaged in R&D, that is, usually a company that does not have this seal, you have to choose whether you want to deduct yourself fiscally by a person who carries out R&D activities or to subsidise your social security contribution.

This seal is a recognition given by the Spanish Ministry to those companies that opt for R&D. If you have the Innovative SME label, both incentives are fully compatible, so that, for the same worker, your company could perceive both incentives.

But you will have other advantages, the main benefits that you will be able to get if you request this bonus are:

  1. Monthly savings thanks to its direct application.
  2. Reduction in operating costs thanks to lower personnel costs.
  3. Increasedcompany’s competitiveness
  4. Development of an efficient R&D savings strategy

As you can see, opting for this spanish Social Security bonus for R&D can bring many economic benefits to your company. If you want to know more we recommend requesting information from companies specialized in grant issues such as UpBizor. In addition, we recommend that you watch the recording of the #TalkingAboutTalent 2 on Financing, where we talk about how to overcome the financing stages and investment rounds in a StartUp successfully.

For this article we have had the collaboration of MarĆ­a Alejandra Vivas of the consultancy Upbizor.

Tell us: Is your business dedicated to R&D? Have you ever applied for this bonus? Has it been positive for your business?

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