The ORDER No. 1056 of the 5th of July 2016 was published in the State Gazette No. 536 of 13 July 2016 for the approval of the Rules regarding the deduction to the calculation of the tax result of the expenses for research and development.
The tax payers paying profit taxes benefit from the tax incentives provided in Art. 20 of Law No. 227/2015 regarding the Fiscal Code with subsequent changes and additions for the research and development activities, defined through the present rules, exercised through individual means or through collaboration/association/agreement, for valorization purpose.
The tax incentives for research and development represent the deduction of the tax result, the tax payers can benefit from, through a 50% additional deduction of the expenditure incurred by them in that particular tax year, for research and development activities, as well as by applying the accelerated depreciation method in case of equipment designed by research and development activities.
The tax incentives are granted for the research and development activities exercised within the domestic territory but also within member states of the European Union or within states belonging to the European Economic Area
The valorization can occur both for private use, by undertaking the research results as part of your own activity according to the requirements of industrial or commercial activity exercised by the tax payer, as well as by selling the research results or using them for service provision or work execution, as well as by exploiting the resulted intellectual property rights.
In case the research and development activities are exercised by several tax payers by collaboration/association/agreement, the tax incentives are granted to each of them, according to the eligible incurred expenditure. The eligible expenditure incurred by a tax payer are not taken into consideration when establishing the tax incentives granted to other tax payers.
In case part of the research and development activities exercised by a third party, at his request, the tax incentives are granted to them, if the conditions of the present order are fulfilled and the beneficiary will not take into consideration the expenditure of this third party to his own fiscal incentive.
The deductions are not recalculated in case of failure to achieve the objectives of the research and development project.
The eligible costs taken into account when granting the additional deduction to the tax result calculation are the following:
– costs for the depreciation or rental of tangible and intangible assets or part of these expenses related to the period of time using these tangible and intangible assets for research and development activities;
– costs for the staff participating in research and development activities , including related activities (documentation, carrying out studies, experiments, measurements, experience exchange);
– costs for maintaining and repairing the tangible and intangible assets mentioned at paragraph a);
– operating costs , including: costs for the services provided by third parties, costs for consumables, costs regarding low value items, raw materials, pieces, modules, components, costs regarding experimental animals, as well as other products , processes or similar services used at research and development activities.
– general costs, which can be allocated directly to the research results or, proportionally, by using an allocation key; the allocation key is the one used by the tax payer for allocating mutual expenses>
- under the directly allocated general costs, also the following costs can be included: the rent for the place where the research and development activities are exercised, utilities such as: running water, sewers, sanitation, electricity and heat, natural gas and office equipment, duplication and reprography, postal and courier services, telephone, fax, internet, transport, storage, related to the research and development activities necessary for obtaining the research results;
- under the general costs allocated through the allocation key also the following costs can be included: administrative and accounting services, postal and telephone services, services for maintaining IT equipment and systems, duplication and reprography, consumables and office equipment, rent of the location where the activities of the project are exercised, utilities such as: running water, sewers, sanitation, electricity and heat, natural gas and other costs necessary for the implementation of the project.
In case the expenses mentioned at paragraph (1) a)-d) are not fully registered for the research and development activities, these will be allocated by using an allocation key established by the tax payer.
In case the development expenses shall be capitalized according to applicable accounting arrangements, the tax deduction can be applied in the tax period of time in which these are registered or in the period of time these are transferred as expenses in the profit and loss account.