In October, the authorities published two new orders clarifying the application of tax incentives for R&D activities provided for under the Fiscal Code. The new provisions become applicable as of 1 January 2023. They include:
- The conditions that need to be met by R&D activities in order to qualify for tax incentives have been updated, such that: (i) they must be presented as part of a project containing the following information: the purpose and aims of the project, the field of R&D, the timeframe of the project, the resources allocated, the project budget, the category of result of the R&D activity, and a description of the innovative nature of the project; (ii) the activities undertaken must be applied research and/or technological development activities. Technological development activities include experimental development activities.
- In order to apply the tax incentives provided for in the Fiscal Code, taxpayers (with the exception of large taxpayers) may request certification of their activity by an expert registered with the REXCD. Large taxpayers are obliged to request such certification by an expert registered with the REXCD.
- The establishment of the RECXD has been approved and, according to press releases issued by the authorities, will become operational on 1 January 2023.
- In order to obtain certification, the taxpayer requests an expert opinion and the state authority for research and development appoints an expert to provide it.
- Once the expert opinion has been provided by the appointed expert, if the taxpayer raises any objections, the authorities will initiate a conciliation procedure between the parties. The conciliation process ends with the parties agreeing to amend the expert report.
- After the report is finalised, if the conclusion of the report is favourable, the expert certificate is issued within 10 working days. The document will be used when applying to the tax authority for application of the tax incentives provided for in the Fiscal Code.
- Subsequently, irrespective of the conclusions of the expert report, the authorities may initiate a review of the expert opinion process for the sole purpose of establishing any procedural flaws. If procedural flaws are found, the expert report will be re-examined.
Source: Joint Order of the Ministry of Finance and the Ministry of Research, Innovation and Digitisation no. 3265/21453/2022 amending and supplementing Order of the Ministry of Public Finance and the Ministry of National Education and Scientific Research no. 1056/4435/2016 approving the Norms on deductions for research and development expenses in the calculation of fiscal result, as published on 4 October 2022
Order of the Ministry of Research, Innovation and Digitisation no. 21578/2022 approving the establishment of the National Register of Experts for the Certification of Research and Development Activities (REXCD), the Selection Methodology for the Body of Experts and the Methodological Rules for the Provision of Expert Opinion with a view to the Certification of Research and Development Activities, as published on 31 October 2022
