Tax breaks for companies with R&D activities
Effective July 1, 2014, companies can subtract from their Corporate Income Tax three times the amount of expenditures invested in Research and Development (R&D) activities. Previously, the allowed amount was 1.5 times the R&D expenditures.
To avoid any misinterpretation of the tax code, the new legislation provides definitions of R&D activities and guidance on evaluation. Company’s R&D activities have to meet the following requirements:
For the tax payer to apply the tax break, he needs to evaluate the eligibility of the planned R&D activities and produce an R&D project that explains its objectives – to produce a new product or technology that neither the company nor anyone else has ever made before. Exceptions for non-innovative products can be made in cases when the tax payer proves that the company was not aware of such a product or research or it was not available at the time. The exception rule applies, for instance, in cases when the production is economically beneficial or if the company has patent for the product or its research.
Horizon 2020 programme
Horizon 2020 offers a large variety of funding opportunities for research and innovation activities.
The beneficiaries of the program are Small- and Medium-sized Enterprises (SMEs); universities, research centres; government organizations; non-governmental organizations; and individual researchers.
Horizon 2020 is divided into 3 pillars corresponding to its main priorities:
For small businesses:
SMEs are encouraged to participate across the whole Horizon 2020 programme. SMEs can engage in collaborative projects as part of a consortium, or seek support through a new dedicated SME instrument for highly innovative smaller companies.
Multi-participation or mono-participation?
Most of the Horizon 2020 themes support collaborative research projects where at least 3 organizations from different countries form a consortium. However, there are a number of opportunities also for mono-participant actions:
Approximately 80 billion EUR over seven years
Maximum funding amount is 70% - 100% of total eligible project costs.
More information: http://ec.europa.eu/programmes/horizon2020
The EUROSTARS Programme
The Eurostars Programme is the first European funding and support programme (the EU-EUREKA joint funding programme) to be specifically dedicated to R&D performing SMEs, and co-funded by the European Communities and 33 EUREKA member countries.
It is fine-tuned to focus on the needs of SMEs, and specifically targets the development of new products, processes and services and the access to transnational and international markets.
There are some eligibility criteria to comply with in order to apply in the Eurostars Programme, a summary of the different criteria is following:
EUREKA's Eurostars Programme is open for funding applications on a continuous basis, with an average of two application submission deadlines each year. The registration and application process is currently closed and will open again in 2017.
In Latvia the financial support up to 80% of a participant's eligible costs is granted. The other amount of funding has to be invested by the applying institution itself or from some other non-governmental source as a co-financing. Investment "In kind" is possible.
8 Contact Points for Technology Transfer
Technology transfer contact points (TPK) are research institutions or university departments that support and promote knowledge and technology transfer and which are responsible for establishing and maintaining external communication, providing information about the organization’s research activities and experiences.
Currently there are 8 technology transfer contact points operating in Latvia.
Please find their contact information here.
LIAA has established business incubators in Daugavpils, Jēkabpils, Jelgava, Jūrmala, Liepāja, Rēzekne, Valmiera and Ventspils, as well as in several other municipalities, while in Riga a major Creative Industries Incubator has been set up, accessible from anywhere within an approximately 100 km radius. In municipalities where no incubators are available, businessmen are able to use the ‘virtual incubation’ services, including co-funding for renting premises in any local government, and other incubator services.
Support for starting a business are available to microenterprises, small and medium-sized companies, and private individuals.
Seed Forum Latvia
The Seed Forum network is giving born global companies seeking capital a unique opportunity to pitch their investment proposal concepts to investors by facilitating global, national and local investor matchmaking forums. The companies pitching to investors are nominated, trained and selected in the Seed Forum process to secure that the companies are investor-ready when they are pitching to investors. The Seed Forum process is very important to reduce the risk on investments in start-ups. The mission of Seed Forum is to provide investor ready born global companies to investors and to educate companies in fundraising and reduce the risk of investment for investors.
Seed Forum Pitch Training seminar schedule: www.seedforum.org/academy
More information on these incentives can be provided by Investment Promotion Division.