The basic condition for claiming expenditure on research and development projects as a deductible item in the tax return is the timely and correct submission of the "Notice of Intention to Deduct the Deduction for Research and Development Support from the Tax Base", the so-called notification, to the relevant tax office. Do you know how to submit a notice so that you meet all legal requirements?
This obligation has been in force since 1 April 2019 and represents the first formal step of the taxpayer towards the tax administrator in relation to the specific project for which he intends to apply the deduction. In the case of notifying more than one project, the taxpayer is obliged to send a notice for each project separately, with the proviso that one submission to the tax office may contain several separate notices.
The advice must meet the legal requirements in terms of content and method of submission to the tax office. These essentials include:
By submitting a notification, the taxpayer only creates the possibility to claim eligible expenses for the research and development project – it is therefore his right, not his obligation.
Whether the taxpayer will ultimately apply the deductible item to the research and development project is conditional on the fulfilment of other criteria, which include, in particular, the presence of an appreciable element of novelty in the project and the clarification of research or technical uncertainty in the project.
Just as companies plan budgets, investments or personnel issues for the new fiscal year, they also prepare their research and development projects – including the capacities of individual employees for research and development. Development activities defined in this way most often start at the beginning of the new year. With the end of the previous year approaching, final preparations are underway and it should be remembered that in order to be able to include these projects in the tax deduction, it is necessary to send a notice to the tax office in time.
In the context of this article, “timely” submission is considered to be a submission by 31.12.2025. Its main advantage is the ability to include the entire calendar year in the cost records without the need to filter expenses incurred after the date of filing the notice. This prevents the incurrence of ineligible costs and at the same time significantly reduces the administrative burden on employees of economic departments.
Taxpayers who implement R&D projects in a planned manner, but without any link to the beginning of the new (fiscal) year, i.e. mostly ad hoc or custom R&D, submit a “Notice of Intention to Deduct a Deduction from the Tax Base to Support R&D” continuously throughout the financial year. These companies are already obliged to separate the expenses for R&D projects into non-applicable, i.e. expenses/costs incurred before the notice was sent, and applicable, i.e. expenses/costs on the project incurred after the notice was sent to the tax office, i.e. such expenses that can be included in the deduction for R&D projects.
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By applying a deductible item for research and development in your tax return, you can reuse the saved funds in development projects to increase your competitiveness and gain a technical and technological advantage over others. If you do not know what to do or do not have the capacity to deal with everything in connection with the advice, do not hesitate to contact us. We will advise you on the name, content of the notice and submission to the tax office.
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