Super-deduction on R&D can help companies in crises

The funds saved through the tool can be used for further investments or stabilising the situation.

Illustrative stock photoIllustrative stock photo (Source: Pixabay)

The super-deduction on research and development is one of a few systemic tools to support this kind of activities in Slovakia’s business sector. It is an indirect support, enabling companies to additionally deduct certain expenditures from their tax base, which motivates them to have their own research.

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It is extremely important because companies gain a competitive advantage in the form of know-how from their own projects. They also appear more stable towards unfavourable circumstances, are more agile and, in the end, better prepared to handle crises.

This tool can save companies up to 21 percent of their costs on R&D.

For example: if a company contributes €100,000 for its research during the taxing period, it may reduce its tax base additionally by whole value via the super-deduction. It means it can save €21,000 on paid taxes and can invest these funds into other ventures or development. Until this upcoming year, it was twice as much, but unfortunately it was reduced since FY 2022.

Current statistics

Altogether 670 companies have used the R&D tax deduction since its introduction in 2015, according to the Financial Administration’s data. Of them, 149 used the mechanism for the first time in 2020. This year, 397 companies have applied the super-deduction so far.

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