What is Tax Lease I+D? Tax incentives for innovative startups and SMEs

Tax Lease can be an attractive financing alternative for companies that carry out research and development activities.

For R&D projects, Tax Lease is a funding instrument capable of channeling private investment to the research sector.

In today's article, we will investigate what Tax Lease is, its requirements, what its process is and what its different advantages are. We begin the article by summarizing two main aspects of this tax incentive:

  • The company that develops innovative projects receives in liquid money the equivalent of Tax Deductions for R+D+i which you cannot take advantage of, with greater advantages and speed than with the Monetization of Deductions.
  • The investor reduces the payment of Corporate Tax, when deducted for the R+D+i activities of the company that develops the innovative projects.

What is Tax Lease I+D? Definition of the tax incentive

Tax Lease, also called Tax Equity, is a trilateral tax operation that is used to improve corporate tax taxation, significantly reducing the taxes that the parties involved must pay. To carry out a Tax Lease, it is usually opted for leasing financing in which different organizations participate. It is an investment tool focused on R&D projects. In this private investment model, the participation of investors in R&D activities is carried out through a financial participation in an Economic Interest Grouping (IEA). It provides a remarkable return for financing companies, which can reach 50% in 6 months.

Tax Lease Requirements

To be able to obtain R&D Tax Lease as an investment vehicle, investors must be legal persons subject to Corporate Tax or individuals who are taxed for Professional Activities in personal income tax. In order to take advantage of the tax deductions, as well as the negative tax bases generated by this operation, they must have a significant positive contribution. Other interesting facts are that the intensity of funding is usually around 30-35% of the cost of the project. It can also be even higher than Tax Lease Deductions. As for the budget, there is no maximum in Tax Lease.

Tax Lease Structure Process

R&D Tax Lease has a complex three-part mechanism. It involves the partial co-financing of certain R&D projects through structures based on the transfer of tax credits through the creation of an IEA. Below, we find in a descriptive infographic their broken down process.

Infografia Tax Lease Intelectium

To begin with, you need to create an Economic Interest Grouping (IEA), which is an entity regulated by the Law 12/1991 for economic interest groups. Its corporate purpose will be scientific research, technological and experimental development, the development of innovation, and the exploitation of the results obtained by the development of R+D+i activities. Investors will participate in the IEA, contributing capital to it. Subsequently, the company that develops the R&D project on behalf of the IEA, bills the IEA for the services provided. The IEA is the owner of the R&D project and, therefore, may apply the corresponding tax credits. Investors grant the R&D company a purchase option on 100% of the IEA's shares, while the R&D company will provide the IEA with a sell option with respect to the result of the R&D activity. Finally, the IEA will pay the researcher the agreed amount, out of the capital, in the part to be financed previously committed.

Tax Lease Benefits

The main advantages of a Tax Lease are the following:

  • The company's capital is not transferred. Investment through an IEA does not imply an entry into the capital stock of the research firm.
  • It is a safe operation in which the qualification of projects as R&D or technological innovation (and therefore the tax deduction associated with them, which can be between 12% and 42% of the total amount) is guaranteed by obtaining a certificate Former ante, issued by an entity authorized by ENAC, and a Binding Motivated Report (IMV) Ex Post of the Ministry of Science, Innovation and Universities.
  • The times for receiving funding are very short. This is a relatively simple operation, with an estimated evaluation and signing time of three or four months at most.
  • It's a much faster alternative to the monetization of tax deduction.
  • The Tax Lease scheme increases the company's turnover and improve the company's financial picture.

Do you want us to help you apply for Tax Lease?

We are responsible for validating if your company can benefit from this tax incentive and managing the entire operation to achieve it. Contact us through the following Form or through comunicacion@intelectium.com. We'll be happy to help!

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