R+D+i: Corporate Income Tax Incentives in Spain

Many companies, especially small and medium-sized enterprises (SMEs), fail to maximize the benefits of R+D+I tax credits due to a lack of awareness of this tax advantage.

What is I+D+i?

In Spanish, I+D+i is investigación, desarrollo e innovación, which translates to research, development, and innovation in English. These are key business concepts that combine innovation and the development of new products, services, and technologies to promote improvements and new products that enhance competitiveness in the market.

Using these criteria at a consolidated level, the R+D+I tax credit is generally 25%. However, the regulations allow for a 42% tax credit when expenses exceed the average of the two previous fiscal years.

Example: In the first year, you claim the R+D+i tax credit. What percentage would be applied? If it is a newly established company, what would be the average of the two previous years? 0. What percentage would apply? 42%

Before calculating this type of tax incentive, remember that obtaining a binding, reasoned report to certify this transaction is optional, but we do recommend doing so through a third party, a certification body accredited by ENAC (Entidad Nacional de Acreditación) for the techno-scientific qualification, so that the Tax Agency cannot later challenge said qualification.

Steps to consider:

Contact an ENAC-accredited certification body (a national certification company that will issue a binding, reasoned report). Once you have determined whether it is R&D or a technological innovation, contact the Ministry of Science. This binding, reasoned report provides certainty and legal security regarding the techno-scientific classification. The Tax Agency cannot dispute the techno-scientific classification. However, the financial aspect, that is, the quantification of the deduction, is what the administration can dispute.

Finally, we advise against using Economic Interest Groupings (EIGs) to claim I&D deductions. 

What do we mean by this?

Many companies promote EIGs to obtain these incentives, which is strongly discouraged. These are very complex structures that have been abused by many taxpayers, although in many cases they were validated in their… These methods have recently become less viable.

Therefore, while an R&D project can be very profitable because it offers substantial deductions, if the project is IT-related, the deduction is much lower. It’s also worth noting that applying these deductions without proper documentation may result in late-payment interest charges.

In the next video, we’ll discuss tips for claiming deductions for an R+D+i project and the corresponding complexity of filing amended returns.