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Deductions for research and development
Companies and individuals conducting business or agricultural operations can claim various deductions for research and development.
General additional deduction (starting tax year 2023)
The general additional deduction is 50% of the wage expenses and expenses for purchased services related to the taxpayer’s own research and development activities. The maximum deduction is €500,000 and the minimum deduction is €5,000 in a tax year. The general additional deduction was available for the first time for tax year 2023.
Extra additional deduction (starting tax year 2024)
The extra additional deduction is based on the taxpayer’s increased research and development expenses. The taxpayer is entitled to an extra additional deduction of 45% if their total expenses for research and development during the tax year have increased from the previous tax year. The maximum amount of the extra additional deduction is €500,000 per tax year. There is no minimum.
Together, the general additional deduction and the extra additional deduction are called the combined deduction.
Note that you must attach to the tax return a separate account of the research and development activities that the deduction is based on.
Temporary additional deduction (tax years 2021–2027)
The temporary additional deduction can be claimed on the basis of subcontracting invoices related to research and development in tax years 2021–2027. The basis of the deduction is a subcontracting invoice that a company or corporate entity pays to a research organisation or an organisation disseminating information. From tax year 2022 onwards, the temporary additional deduction is 150% of such subcontracting invoices. The maximum deduction is €500,000.
Note that you must attach to the tax return a separate account of the research and development activities that the deduction is based on.
Things to note
The general additional deduction and the temporary additional deduction cannot be made on the basis of the same expenses. As regards the extra additional deduction, it is irrelevant whether the general additional deduction or the temporary additional deduction – or neither of the two – has been made.
Also note that deductions for research and development cannot be made on the basis of expenses for which the company has received direct state aid or other public subsidies.
Before claiming additional deductions for research and development, read the following:
- detailed tax guidance on the subject, where the conditions for the grant of the deductions are discussed in more detail, and
- instructions for filling in Forms 67A and 67Y, which describe the account that should be attached to the tax return in greater detail.
If a deduction claimed on the tax return does not meet the conditions prescribed by law or if the account submitted is inaccurate or incomplete, the Tax Administration can impose a punitive tax increase.
Read more
Combined deduction based on research and development costs, detailed guidance
Additional deduction for research and development in tax years 2021–2027, detailed guidance