The evolution of deductions in respect of software activities and the taxation of indirect costs linked to R&D&I

After an introduction by Clara Jiménez, Tax Partner at Pérez-Llorca, and Victor Tarruella, CEO of Euro-Funding, Juan Manuel Garrido, Deputy Assistant Director General for Promotion of Innovation, of the Ministry of Economy, Industry and Competitiveness opened the session. He highlighted the growth in the number of requests for the issue of reasoned reports and the fact that the proportion of requests for these reports from SMEs has increased considerably, a sign that small and medium-sized enterprises are taking a leading role in the development of R&D&I in Spain. Garrido also reviewed the advantages of the label of “innovative SME”, as well as developments that are being considered for the short and medium term, including the proposals that are being examined to further improve the service provided to those who apply for reasoned reports from the Sub-Directorate General.

Manuel Olea, Deputy Assistant Director of Legal Regulation of the Tax Agency, was the next to speak. He presented a selection of rulings from Spanish Courts that clarify some traditionally controversial issues in the field of R&D&I. Olea also discussed other topical issues, such as the time limit of the right of the Tax Agency to initiate checks on taxpayers, the non-deductibility of expenses for R&D&I in entities that are merely intermediaries in such activities and the categorisation of software development projects as R&D&I activities.

The third speaker was Fernando Bonastre, Director of Fiscal Affairs (Downstream) and Spain at Repsol. He analysed the recent Supreme Court ruling of 2 February 2017, and discussed the deductibility of indirect costs which are common to different projects where the activity carried out by the entity takes place in a technological centre which is used exclusively for R&D&I activities.

José Tomás Romero, Head of the Innovation Department at AMETIC, ended the session with a presentation on the current status of tax deductions for R&D&I in the area of software from the perspective of ICT companies. He also highlighted the thus far little-known option of benefiting from deductions for technological innovation for conducting pilots of animations and video games.

The session ended with a pleasant debate between the speakers and the audience due to the relevance of the issues raised and the controversies that they cause.