Finland is looking to boost companies’ R&D efforts with unprecedented incentives. A new tax law will take effect on 1 January 2021 with the stated aim of bringing tax relief to Research & Development activities during 2021-2025. Companies that are conducting some sort of R&D activity with a genuine research organization meet the criteria for the tax deduction. This is a brand new tax deduction which does not constitute state aid under EU’s definitions.
What all this means in practice is that there is an additional tax deduction a company can now make for its R&D costs, if the actual R&D work is performed by a subcontracted party (university/research institute etc). The “bonus” deduction is 50% on top of the existing deduction which is 100% – bringing the total deduction to whopping 150% and richly earning the designation “super-deduction”.
The minimum threshold for tax deductible costs per fiscal year is EUR 10,000 and the maximum limit is one million euro, meaning that the actual additional tax deduction is between EUR 5,000-500,000 per fiscal year.
The super-deduction is available for all companies operating in Finland, both domestic and international.
For more information visit Business Finland’s web site