SIFIDE: what does this tax incentive for companies consist of?
Posted: Thu Dec 26, 2024 3:27 am
Research and Development is a pillar for the growth and competitiveness of companies in particular and of the economy in general and, to simultaneously reward companies that invest in R&D and increase their possibilities of doing so, the State created a specific tax benefit, SIFIDE.
What is SIFIDE?
SIFIDE, or the System of Tax Incentives for Corporate R&D , is an incentive system created to increase the competitiveness of companies by rewarding them for their investments in Research and Development (R&D).
Created in 1997, SIFIDE was subject to several revisions, until Law No. 55-A/2010, of 31/12 (State Budget for 2011) approved SIFIDE II, initially to be in force in the tax periods from 2011 to 2015. Among several other changes, this period was extended by Law No. 2/2020, of 31/03, to be in force until the tax period of 2025.
This incentive is granted by deducting from the IRC hungary whatsapp number database a percentage of R&D expenses eligible under the legislation for support, the Investment Tax Code , in the part that is not co-financed by the State or by European Funds, for which it is necessary to make an application.
According to the National Innovation Agency (ANI), the entity responsible for SIFIDE, between 2006 and 2022, 22,653 applications from 7,232 companies were approved (out of 27,579 received from 8,610 companies), with a calculated R&D investment of 8,936.3 million euros, to which a tax credit of 4,496.6 million euros was granted, an average of 198.5 thousand euros of support per application.
Who can apply
All IRC taxpayers resident in national territory, as well as non-residents with a permanent establishment, who carry out, as their main activity, a commercial, industrial, agricultural or service activity, may apply for SIFIDE, provided that they cumulatively:
your taxable profit is not determined by indirect methods;
do not have debts with the Tax Authority (AT) and Social Security or have their payment duly assured;
have R&D expenses incurred in the tax periods between January 1, 2014 and December 31, 2025.
R&D activities covered by SIFIDE
As the name of the incentive itself indicates, its scope includes research and development expenses incurred by IRC taxpayers, considering that:
research expenses are those incurred with a view to acquiring new scientific or technical knowledge;
development expenses are those incurred through the exploitation of the results of research work or other scientific or technical knowledge with the aim of discovering or substantially improving raw materials, products, services or manufacturing processes.
For this purpose, R&D activities are considered to be the development of a new product, service or process or the introduction of technical improvements, provided that there is an appreciable element of novelty and the resolution of a scientific and/or technological uncertainty .
Eligible expenses under SIFIDE
As they fall within the scope of research and development activities, the following expenses are eligible under SIFIDE:
with acquisitions of tangible fixed assets, with the exception of buildings and land, provided that they are created or acquired in a new state and in proportion to their allocation to carrying out research and development activities;
with personnel directly involved in R&D tasks with minimum academic qualifications of level 4 of the National Qualifications Framework (QNQ) – if they have a doctorate, the expense is considered at 120%;
operating expenses, up to a maximum of 55% of expenses with personnel directly involved in R&D tasks, with minimum educational qualifications of level 4 of the QNQ, accounted for as remuneration, wages or salaries, for the financial year;
with the participation of managers and staff in the management of R&D institutions;
with the contracting of R&D activities with public entities (or with public utility status) or entities whose suitability is recognized by ANI;
with participation in the capital of R&D institutions and contributions to investment funds, public or private, that make equity and quasi-equity investments in companies dedicated mainly to R&D whose suitability is recognized by ANI;
with patent registration and maintenance;
with the acquisition of patents that are predominantly intended for carrying out R&D activities, in the case of micro, small and medium-sized companies;
with R&D audits;
with demonstration actions resulting from supported R&D projects, when they have been previously communicated to ANI.
If the expenses relate to research and development activities associated with eco-design projects for products, they are considered at 120%.
What is SIFIDE?
SIFIDE, or the System of Tax Incentives for Corporate R&D , is an incentive system created to increase the competitiveness of companies by rewarding them for their investments in Research and Development (R&D).
Created in 1997, SIFIDE was subject to several revisions, until Law No. 55-A/2010, of 31/12 (State Budget for 2011) approved SIFIDE II, initially to be in force in the tax periods from 2011 to 2015. Among several other changes, this period was extended by Law No. 2/2020, of 31/03, to be in force until the tax period of 2025.
This incentive is granted by deducting from the IRC hungary whatsapp number database a percentage of R&D expenses eligible under the legislation for support, the Investment Tax Code , in the part that is not co-financed by the State or by European Funds, for which it is necessary to make an application.
According to the National Innovation Agency (ANI), the entity responsible for SIFIDE, between 2006 and 2022, 22,653 applications from 7,232 companies were approved (out of 27,579 received from 8,610 companies), with a calculated R&D investment of 8,936.3 million euros, to which a tax credit of 4,496.6 million euros was granted, an average of 198.5 thousand euros of support per application.
Who can apply
All IRC taxpayers resident in national territory, as well as non-residents with a permanent establishment, who carry out, as their main activity, a commercial, industrial, agricultural or service activity, may apply for SIFIDE, provided that they cumulatively:
your taxable profit is not determined by indirect methods;
do not have debts with the Tax Authority (AT) and Social Security or have their payment duly assured;
have R&D expenses incurred in the tax periods between January 1, 2014 and December 31, 2025.
R&D activities covered by SIFIDE
As the name of the incentive itself indicates, its scope includes research and development expenses incurred by IRC taxpayers, considering that:
research expenses are those incurred with a view to acquiring new scientific or technical knowledge;
development expenses are those incurred through the exploitation of the results of research work or other scientific or technical knowledge with the aim of discovering or substantially improving raw materials, products, services or manufacturing processes.
For this purpose, R&D activities are considered to be the development of a new product, service or process or the introduction of technical improvements, provided that there is an appreciable element of novelty and the resolution of a scientific and/or technological uncertainty .
Eligible expenses under SIFIDE
As they fall within the scope of research and development activities, the following expenses are eligible under SIFIDE:
with acquisitions of tangible fixed assets, with the exception of buildings and land, provided that they are created or acquired in a new state and in proportion to their allocation to carrying out research and development activities;
with personnel directly involved in R&D tasks with minimum academic qualifications of level 4 of the National Qualifications Framework (QNQ) – if they have a doctorate, the expense is considered at 120%;
operating expenses, up to a maximum of 55% of expenses with personnel directly involved in R&D tasks, with minimum educational qualifications of level 4 of the QNQ, accounted for as remuneration, wages or salaries, for the financial year;
with the participation of managers and staff in the management of R&D institutions;
with the contracting of R&D activities with public entities (or with public utility status) or entities whose suitability is recognized by ANI;
with participation in the capital of R&D institutions and contributions to investment funds, public or private, that make equity and quasi-equity investments in companies dedicated mainly to R&D whose suitability is recognized by ANI;
with patent registration and maintenance;
with the acquisition of patents that are predominantly intended for carrying out R&D activities, in the case of micro, small and medium-sized companies;
with R&D audits;
with demonstration actions resulting from supported R&D projects, when they have been previously communicated to ANI.
If the expenses relate to research and development activities associated with eco-design projects for products, they are considered at 120%.