ERNST & YOUNG SRL

  |  21.07.2016

Tax alert No. 23 July 2016

Order of the Minister of Public Finances and of Minister of National Education and Scientific Research no. 1.056 / 4.435 of 5 July 2016 approving the regarding the deductions for research-development expenses in the computation of the tax result, Official Gazette no. 526 / 13 July 2016

The Order updates the norms regarding the tax incentives related to the research & development activities granted in the computation of the taxable result / taxable profit, in order to be aligned with the provisions of Law 227 / 2015 on the Fiscal Code, with the subsequent amendments and completions. On the date of entering into force of this Order, Order no. 2.086 / 4.504 / 2010 is repealed.


The Order brings several amendments and clarifications, as compared to the former norms. Among these, we note the most important ones:


• If part of the research & development activities is performed through a third party, the respective third party benefits from the supplementary deduction in case the other conditions for being granted the facility are met. In this case, the beneficiary taxpayer will not be able to take into consideration for the computation of its own incentive the expenses registered with the respective third party;

 

• In case the research & development expenses are carried out by several taxpayers through collaboration / association / agreement, the tax incentives are individually computed for each taxpayer, depending on each member’s eligible expenses.

 

The eligible expenses registered by a taxpayer are not considered for the computation when establishing the tax incentives provided to the other taxpayers;

 

• The Norms have been aligned with the provisions of the Tax Code: as a condition for being granted with the supplementary deduction, the research & development activity must belong to the category of applied research and / or technological development, as the Tax Code provides for (before, these should have belonged to the categories of industrial research or experimental


• The provisions regarding the possibility of the taxpayer to request a certification / expertise regarding the fulfillment of the tax incentive conditions have been eliminated. However, there is still an Article providing for the set-up of the Register of experts on research and development areas certified by the Ministry of National Education and Scientific Research in order to determine if the activities can be categorized as research & development;


• Also, the definitions of specific terms have been eliminated and a reference is made to the Government Ordinance no. 57 / 2002 regarding scientific research and technical development, together with the Frascati Manual issued by the OECD.
 

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