All About Innovation Projects And Tax Deductions

SMEs play a key role in the present and the economic future in Australia. Small and medium-sized companies make up 99% of the business fabric of our country and 65% of the national GDP. These data reflect the importance of SMEs in the development and future of our society.

To achieve differentiation in such demanding markets, innovation is the way forward to achieve this R&D tax offset specialization that provides added value to our company. Not only because of the benefits (tangible and intangible) that this novelty brings, but also because it is possible to qualify for tax incentives due to the innovative nature of the company.

What Does The Innovation Of A Project Consist Of?

First of all, a company is likely to pursue innovative practices, even if it doesn’t really have it established as such. In most cases, innovation arises from the need to improve and make the company more competitive in its sector. Thanks to the experience obtained in the market in which it operates, the company has the need to acquire a difference and an added value with respect to the competition. And this is done by a high percentage of SMEs that achieve success in their sector, regardless of their activity.

Sometimes, there is the misconception that it is necessary for the company to have a large technical team or a department dedicated exclusively to innovation; or state-of-the-art facilities in terms of technology.

However, roughly an innovative company is one that will develop, in the foreseeable future, new or substantially improved products, services or processes compared to the state of the art in its sector and which carry an implicit risk of technological or industrial failure.

These practices are frequent in companies, although sometimes the company itself does not classify them as an innovative project.

Why Innovate?

According to the definition of the word, innovate is “any change based on the knowledge that generates value”. Therefore, to innovate is to generate more value to increase the competitiveness of the company. And this has benefits for the company itself and also for its environment and its sector (more jobs, better products …).

For this reason, Public Administrations encourage the promotion of business innovation through tax incentives and bonuses. Tax incentives are based on deductions in corporate tax for carrying out research and development projects and/or technological innovation. On the other hand, the bonuses are based on the business quota of the research staff’s social security.

Tax Deductions To Innovative Projects

Tax deductions for innovative projects are the main way to promote innovation by Public Administrations. Furthermore, the Spanish system of tax deductions for innovation is one of the most favorable in the world. You can reach up to 42% of the direct costs of the project.

Tax Deductions are an indirect financing tool for innovation that considerably reduce the amounts to be paid in Corporation Tax, through a return on expenses incurred in an R + D + i project.

For this reason, tax deductions for innovation are one of the instruments used by Public Administrations to promote business innovation, via tax reduction.

In addition, it should be noted that the application to these incentives is free and general. Therefore, companies with innovative projects can operate in any sector (any CNAE is valid). In addition, the application is free for both large companies and small and medium-sized companies.

Among the most outstanding advantages, it should be noted that this incentive has economic effects comparable to the subsidy, but is not taxed. In addition, tax deductions for innovation projects are compatible with other forms of aid.

Rnd Assist, At The Head Of R&D Projects

Australia R&D tax incentive is a consulting firm specializing in the public financing of innovation. It does so through regional, national, and Australian tax incentives and public incentives.

Since it began its activity ten years ago, rnd assist has become a benchmark company in the sector. RND assist currently has five offices in Australia and another in Belgium for the European market.

For all these reasons, RND assist is your strategic partner in relation to financing innovation and business competitiveness.