Commission moots double tax cut for R&D costs

Small, innovative companies could get tax reductions of up to 200 per cent for their R&D activities under tax proposals.

The Common Consolidated Corporate Tax Base, proposed by the European Commission on 25 October, aims to increase innovation activities in Europe. The reforms include measures to help companies deduct the cost of research and innovation from their taxes in order to make such spending more attractive.

Under the plans, some companies could quality for a so-called super-deduction, which means they can deduct an amount higher than the actual amount spent. The full cost of R&D is expected to be 100 per cent deductible, with another 50 per cent deduction for R&D spending of up to 20 million and a further 25 per cent deduction beyond that, the Commission announced.