24 septembrie, 2018

Global fiscal competition to attract economic activity has intensified, especially in the area of incentives granted to R&D activities, according to the EY Worldwide R&D Incentives Reference Guide.

But Romania is not among the countries that place a major focus on fiscal competition: this year, the legislation has not been amended to grant new R&D investment facilities.

Between 2015 and 2017, changes in terms of tax incentives for the R&D field were modest, but 2018 brought significant improvements in many countries – 14 out of 41 countries (namely 34% of the jurisdictions interviewed) forecast new or more generous incentives for research and development this year (compared to only 22% in 2017).

Nine of 14 countries take measures for the second consecutive year.

Examples of very active states:

Singapore has increased the tax deduction for labour costs and consumables needed for the qualification of research and development projects made in Singapore, from 150% to 250%
Poland has increased its tax deduction from 100% to 200% as of January 1, 2018.

Situation in Romania

There are four programs to stimulate research and development:

Exemption from corporate tax in the first 10 years of activity for companies carry out only R&D and innovation activities, as well as associated activities.
additional deduction of 50% of the eligible R&D expenditure in the calculation of the corporate tax
accelerated depreciation of qualified research and development assets
tax exemption for the wage income of employees working in research and development or technological development.

But most facilities are difficult to access:

Employees who already had the tax relief applied on their wages in December 2017 were potentially affected by the transfer of social security contributions from the employer to the employee as of January 2018. Tax legislation has brought, though, with some delay, a legal leverage to compensate for the net loss in salaries of these categories of employees, under certain conditions.
The provisions governing the exemption from corporate tax were introduced in the Romanian Tax Code in January 2017, but the implementation rules have not been issued yet, therefore it cannot be applied.
From a corporate tax perspective, although a large proportion of taxpayers working in this field know the tax benefits, most of them are still in the process of analysing the eligibility, with no clear implementation phase, the study states. This is largely because the lack in consulting the R&D Expert Registry, as it is not functional, although the law provides that the employer, employee or tax authorities may request expert reports prepared by experts enrolled in the Register of experts in domains of research and development, for the validation in the classification of R&D activities.
The 10-year tax exemption facility cannot be applied, as there are no implementation rules and taxpayers have a justifiable fear that this measure can be categorized as State aid.