New super-deduction for Finnish R&D projects

According to a new tax law effective January 1, 2021, both domestic and international companies operating in Finland can make a "super-deduction" for some of their research and development costs. The law is part of the Finnish Government's plan to increase investments in R&D to four percent of the GDP by 2030, and the aim has been to create a simple and straightforward incentive that can be understood without the help of tax consultants.

The new deduction applies to projects where the actual R&D work is subcontracted to a research organization such as a university or research institute, and in addition to deducting the full cost of the work, the company can deduct an additional bonus of 50 percent, bringing the total deduction to 150 % of the cost. The bonus deduction can range from EUR 5 000 to 500 000 per year, and in case the company is making losses, the deduction can be carried forward for ten years.

More information available on Business Finland's site: www.businessfinland.fi/en/whats-new/news/invest-in-finland/2020/finland-gives-companies-150-tax-deduction-for-joint-rd-projects