From our experience, strategic business decision-making should also incorporate into financial planning an emerging benefit that could return millions to the company’s budget. Companies can continue to benefit from tax advantages for investments in production modernisation.
For example, additional income tax deductions of up to 100% of expenses can help with the digital transformation of any company. Saving resources while modernising company would be a win-win.
Not to mention, investment in modernisation is the key to maintaining competitive advantage, increase efficiency and to exceed ever-changing customer needs.
Last but not least, they can help you improve the sustainability of your business.
According to The Financial Directorate of the SR (2023) between the years 2021 and 2022, 175 companies took advantage of the opportunity to deduct their cost for research and development for various project, focused mostly on the automation and development of digital solutions in all sectors of the economy.
Moreover, it can be concluded from the data accessed in public records that one company on average deducted approximately EUR 250,000 of R&D costs from their income tax.
However, for the 2022 tax period, only two companies applied for the deduction of expenses that they sustained in their investments towards the development and optimisation of production processes in order to transform to Industry 4.0. Though the number of companies that utilised this advantageous approach can be considered quite low, the average sum eligible for deduction is as steep as EUR 2.7 million (The Financial Directorate of the SR, 2023).
It is important to add that the deduction was not limited just to 2022 and companies can also apply for the deduction for further years.
The experts at LeitnerLeitner Slovakia can solely recommend to business owners that they take advantage of the tax deductions to save their resources, while improving their company’s technological processes and infrastructure.
Finally, while we can produce a long list of pros on both deductions, we consider as most significant the benefit of returning resources back to business owners and a subsequent increase in their competitive advantage with modernised processes.
Author of this article:
Peter Szabó, LeitnerLeitner
Dip IFR Auditor | Director
List of references:
The Financial Directorate of the SR. (2023a). Zoznam daňových subjektov s odpočtom výdavkov (nákladov) na výskum a vývoj podľa §30c ods. 8 (online; accessed: 10 August 2023).
The Financial Directorate of the SR. (2023b). Zoznam daňových subjektov s odpočtom výdavkov (nákladov) na investície podľa § 30e ods.9 zákona o dani z príjmov (online, accessed: 10 August 2023).
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