Austria

Research and Development (R&D) Incentive

Austria has relatively generous tax incentives, spending an estimated €574 million in payouts to businesses for research subsidies in 2012. Tax Authorities in Austria offer a subsidy, titled “Forschungsprämie”, that is equal to 10% of qualifying R&D expenses.

R&D incentives are provided in the forms of cash, loans and guaranties. The percentage of the R&D premium may increase depending on the category of R&D activity that is being initiated by a company.

Depending on the type of R&D activity that is being undertaken the percentage of the R&D premium may increase. Rates of 20% or higher are prevalent for SMEs, projects that are highly innovative or a project where R&D institutions work alongside several companies in unity. Moreover, aside from the general incentives provided by the Austrian Government, businesses can also acquire the European Commission’s Horizon 2020 program.

Description of Incentive

An R&D incentive of 10% for all qualified R&D expenses for large businesses and SMEs. A company’s tax loss or profit positions do not influence their capability to access the credit. Once the application has been authorised by the Austrian Research Promotion Agency, the subsidy will be promptly paid by the tax authorities via a cash payment to the relevant tax account, which then becomes transferable to any account.

Eligibility Requirements

The eligibility for the incentive is broadly defined and is not restricted to any particular industries. The term ‘research’ encompasses basic and applied research, which comprises experimental development within the limits of the OECD definition – including software development.

A qualified R&D activity, generally, consists of the following factors:

• Any systematic or intensive study in the areas of science or technology;
• Objective of the results is to study the production of new or improved processes, materials, devices or products;
• Conducted in a systematic way to earnestly increase knowledge or develop new applications;

Qualified R&D expenditures include:

• capital investment;
• finance costs;
• staff costs;
• overhead costs;
• leasing costs; and
• subcontractor fees (conditions apply regarding subcontractor qualifying as EU/EEC institution and no relation to the principal, fees cannot exceed €1M annually)

Other Considerations

R&D claims are suitable to future, current and retroactive investment. Claims should be made between the end of fiscal year and date where the tax assessment year obtains legal force.

Services

Swanson Reed offers the following services:

• Advice on tax preparation relevant to claiming the R&D tax credits incentive
• Preparation of documents relating to filing and substantiating a R&D taxation claim
• R&D tax advice and consultations
• R&D tax claim planning and preparation

For a full range of services in relation to the credit, please click here.