More than twenty entrepreneurs from the footwear sector, qualified as a possible beneficiary of some tax deductions through R&D&I, took part in a workshop organized by the Footwear Technology Center of La Rioja, CTCR, and given by specialists of SGS, TÜVRheinlad and Becerra Asesoría Fiscal. Specifically, the content of this training action was mainly focused on the possibility of including the samples of the textile and footwear industries within the concept of technological innovation, included since 2005, in the Corporate Income Tax Law, IS Law 27/2014.
All companies in the sector are entitled to a deduction in the CIT of 12% of all expenditure related to the design and definition phases and the phase of materialization of the prototypes. Deductible expenses include staff, prototyping, prototypes testing, catalogue production (design, photographs, etc.) and the amortization of assets such as lasts, moulds and others. Each samples project comprises a group of collections that are seasonally-grouped, generally in two annual periods (spring/summer samples, autumn/winter samples). Companies additionally have up to 18 years to apply the deduction, which is fully binding with Treasury Administration. Certainly, it is a very important fiscal incentive after the investment in the development of new models.
In this way, attendees, who constantly produce samples of their products, show a great interest in knowing how they can deduct part of that investment by maximizing the deduction system, based on the detailed concepts.
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The Tax Administration may require beneficiary companies to fully justify their right to the application of the corresponding deduction in a possible inspection. This route implies a tax risk with the Treasury, due to the difficulty to differentiate if an activity is R&D, IT or even nothing, as well as allocate appropriately the different expenses.
Consequently, the CTCR offers the interested parties this advisory service in order to prepare the necessary documentation addressing the justification, and particularly, focusing on the submission of a technical and economic report for each project.
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