The Court’s New View on the Utilisation of Clinical Studies as Part of the R&D Deduction

The Supreme Administrative Court (the “SAC”) has found against Vestra Clinics s.r.o. (the “Plaintiff”) in the matter of the possibility of utilising clinical studies as deductible items for research and development (“R&D”). Although the Court confirmed that clinical studies do meet the definition of R&D (as is, after all, indicated in Guidance Note D-288 and the Frascati Manual), the SAC ruled that the Plaintiff’s activities constitute the following of clearly defined instructions as prescribed by the clinical trial report, without containing any elements of novelty or clarifying scientific uncertainty. 

8. 11. 2018

News in the application of the research and development deduction… Are better days ahead?

2016 saw the first drop in the use of the research and development (“R&D”) deduction in the entire 13-year-long existence of this business support. Taxpayers and the expert public noticed increased activity of tax authorities during tax audits focused on the area of R&D. In the last three years, several court rulings have been issued that established the practice of certain unclear legal provisions, but not all the key ones by far. 

4. 7. 2018

Current Trends in the Area of Deduction

As we have informed you in previous articles, R&D tax deductions are increasingly more often examined by the tax administration. The growing number of audits, which often result in legal disputes, leads to uncertainty among taxpayers. It is therefore questionable whether the setup of the deduction aimed at supporting research and development is the only accurate solution and whether it is time to consider an adjustment thereto, also considering the fact that the area has not been modified since 2005. 

24. 4. 2018