Corporate income tax
If the project is R&D, the tax bill drops
The invoice is settled in full. Part of the amount paid to Suto may be deducted from Corporate Income Tax.
Of every €100 paid to Suto, up to €42 may be deducted from Corporate Income Tax.
€42 in the first financial year with R&D activity. If the same expenditure already existed and does not increase, the amount is €25. Suto makes no refund: the invoice is settled in full and the reduction applies to the tax liability.
- 1
The fee is settled as agreed
The monthly amount does not change. It is not a discount on the invoice.
- 2
Part is deducted in the tax return
The tax advisor includes it in the Corporate Income Tax return.
- 3
The tax liability is lower
If it cannot be applied in full in the year, the remainder is carried forward.
Applies
- Development of a product or feature that did not exist
- Resolution of a technical problem with no known solution
- Testing alternative approaches until a viable one is found
Does not apply
- Maintenance and minor modifications
- A website or application with no technical novelty
- Suto’s team does not qualify as the company’s own research staff
Conditions and law
- Only when the work qualifies as R&D. Maintenance and minor modifications are excluded.
- The additional 17% applies to the company’s own research staff, not to Suto’s team.
- In the tax year, up to 25% or 50% of the tax liability may be applied. The excess remains available for up to 18 years.
- Illustrative estimate. The Basque Country and Navarre are governed by their own rules.
Which spending gets the 42%?
R&D spending for the year that exceeds the average of the two previous years. Up to that average, the rate is 25%. If those two years had no R&D spending, the average is zero and the whole of this year’s spending is at 42%.
Does the credit reduce the supplier’s invoice?
The invoice is paid in full. The effect is in corporate income tax: it reduces the tax, or, if the Article 39.2 conditions are met, it can be paid out at 80% of the credit.
Is all custom software R&D?
Advanced software that is a substantial step forward qualifies: products, processes or services that are new or substantially improved. Maintenance and minor updates do not. One engagement can contain parts that qualify and parts that do not.
Who claims the credit when a supplier does the development?
The company that commissions and pays for the work, if the activity qualifies and is carried out in Spain, the EU or the EEA. The 17% for researchers is calculated on that company’s own staff, not on the supplier’s payroll.
Is a reasoned report required?
It is not required to use the credit under the 25% or 50% cap. It is required for the Article 39.2 option: a reasoned report or a prior valuation agreement. That report binds the tax agency on how the activity is classified.
Does this apply in the Basque Country or Navarre?
This explanation is the common Spanish regime. Those territories have their own foral rules.
If the project may involve technical novelty, it should be reviewed against a defined scope.
Suto documents the technical scope. A tax adviser determines whether the activity qualifies as R&D, technological innovation, or neither.