The Financial Administration recently published guidance on the application of research and development (R&D) tax incentives. The guidance specifies the following:
In order to qualify for the R&D tax incentives, the activity must meet criteria of novelty, creativity, uncertainty, systematic work and transferability and/or productivity; the decisive element of whether an activity qualifies for the tax incentive is the novelty of all functions, systems and technologies constituting the product or service and not only the novelty of the final product or service; and companies that apply for the R&D incentive must prove the qualifying R&D activities by disclosing them to the tax authorities upon request.
