In order to provide incentives in research and development, there is a diversified range of funding instruments in Austria, such as the so called R&D premium. As it will be increased by the federal government at the beginning of 2018, it constitutes a current topic in Austria.
The aim of the research premium is to assist businesses in meeting their fiscal obligations. In-house research as well as contract research entitles companies to claim a research premium, which will be increased from 12 to 14 percent on 1.1.2018. The basis of assessment includes expenses for research and experimental development. In case of in-house research wages and salaries, investments as well as finance and overhead costs can be taken into account, as far as they are related to research and experimental development. For the assertion of the in-house research premium, companies have to submit an expert opinion of the Austrian Research Promotion Agency (FFG). The FFG has to prove if the requirements for research and experimental development are fulfilled.
Expenses for contract research can only be taken into account to a limit of 1 million Euros per financial year, whereas the assessment basis for in-house research is not limited.
The R&D premium can be claimed after the end of the financial year at the earliest and by the legal force of the tax assessment at the latest. The premium is credited to the tax account. Therefore it is not considered as revenue or reduction of expense.
In conclusion, Austria wants to give support to companies that operate in the field of research and development. The increase to the R&D premium should demonstrate the efforts of the government to stimulate research activities.