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R&D Tax Credit for Collaborative Research

Finance Act 2022 introduced the R&D Tax Credit for Collaborative Research to encourage R&D in partnership with research centres.

What is R&D Tax Credit for Collaborative Research?

From 1 January 2022, all industrial, commercial, craft and agricultural companies subject to corporation tax will be eligible for the R&D Tax Credit for Collaborative Research. This new scheme has been introduced to compensate for the abolition of the doubling of the base for expenditure on subcontracting to public bodies or bodies treated as public in the research tax credit (CIR) and to preserve private-public partnerships.

For a project to be eligible, it must meet all five R&D Tax Credit criteria:

Novelty
Originality
Presence of technical and/or scientific barriers
Systematicity
Transferability

An effective research collaboration agreement must be in place:

Signed between 1 January 2022 and 31 December 2025 with a research and knowledge dissemination organisation* before the start of the research.
Jointly defined objectives based on a division of labour
Sharing financial, technological and scientific risks, intellectual property, etc.
Sharing results
Organisation invoices without margin
10% of the costs borne at least by the organisations : calculation of the ratio between “the research costs actually borne by the research organisation(s) and the total research costs incurred by all the parties in carrying out the research activities provided for in the collaboration contract”. Expenditure invoiced during the calendar year is taken into account.

* A research and knowledge dissemination organisation is qualified for this scheme if it has 2 approvals: one for the R&D Tax Credit and another specific to this scheme.

Our range of services

1__Audit and selection of the eligible scope

We schedule a meeting to discuss your ongoing R&D projects in order to assess their eligibility according to the criteria presented.

2_Valuation

Once the eligible projects have been selected, we calculate all associated expenses according to the items presented.

3_Technical justification

We compile the technical and financial justification file presenting the selected projects for year N along with the valued expenses.

4_Assistance

In the event of a request for additional information or a tax audit, we will assist you until you obtain your RTC.

What expenses are eligible for the R&D Tax Credit for Collaborative Research?

R&D expenditure eligible for R&D Tax Credit for Collaborative Research is that incurred with an Organisation for Research and Knowledge Dissemination. For an organisation to qualify as a research and knowledge dissemination organisation, it must meet the definition set out by the European Commission in its Communication No 2014/C 198/01. In addition, only partnerships whose contracts are concluded on or after 1 January 2022 are eligible for the R&D Tax Credit for Collaborative Research.

The R&D Tax Credit for Collaborative Research is calculated based on expenditure invoiced during the calendar year, irrespective of the end of the financial year. For closures during the calendar year, the R&D Tax Credit for Collaborative Research is calculated based on eligible expenditure declared in respect of the last completed calendar year.
Expenditure cannot be declared for the R&D Tax Credit.
Eligible expenditure includes equipment, research staff and operating costs.
The proportion of public aid received by the Organisation for Research and Knowledge Dissemination and the company for collaborative research must be deducted from the expenditure;
The reimbursement rate is 50% for SMEs and 40% for non-SMEs.
Expenditure is limited to €6 million per year.Staff costs (researchers and technicians) allocated to R&D activities