The construction sector has undergone a significant transformation in recent decades, driven by the incorporation of innovative technologies and research and development (R&D) processes. In Spain, companies that invest in R&D activities can benefit from tax deductions that contribute to a reduction of their costs. However, many companies in the construction sector are still unaware of the tax benefits available to them for developing innovative projects. Here we explore how some companies in the sector are accessing these deductions.
What are R&D tax deductions?
The Spanish legal framework establishes a series of tax incentives to encourage investment in research and development activities. These deductions are included in Article 35 of the Corporate Income Tax Law, and allow companies to reduce the tax burden derived from their activities. For the construction sector, this can provide significant economic relief.
Tax deductions for R&D can reach up to 42% of the expenses related to these activities, including salaries, materials, subcontracting of technological services, and other resources destined to the development of novel solutions. In addition, there is the possibility of combining these deductions with other incentives, such as rebates on social security contributions for research personnel.
What is considered R&D in construction?
Traditionally, the construction industry has been perceived as a conservative sector when it comes to innovation. However, in recent years there has been a paradigm shift, with the introduction of new technologies and processes such as the Building Information Modelling (BIM), the use of sustainable materials and advanced prefabrication techniques. These developments are clear examples of activities that can be qualified as R&D.
The concept of R&D, according to Spanish tax regulations, includes two types of activities: basic or applied research and experimental development. In the case of construction, these activities may include the improvement of construction materials, the development of energy-efficient systems, the automation of construction processes through robotics or the use of artificial intelligence for the optimisation of resources.
How are innovation processes classified for tax deductions: RIA and IA?
In Spain, for projects of RIA (Research and Innovation Actions)R&D tax deductions can go as high as 42% of the total expenditure related to research and development, depending on the nature of the project and whether the criteria of disruptive innovation and generation of new knowledge are met.
For projects of IA (Innovation Actions)which tend to focus on applied technological innovation, deduction rates tend to be in the region of 12% to 25%The projects often involve substantial improvements to existing processes or products, rather than pure research.
How some companies are accessing these deductions
Although R&D tax deductions have been available for some time, many companies in the construction sector do not apply for them due to lack of knowledge or the complexity of the procedures. In this context, technology centres such as CTCON play an important role in helping companies to identify projects that can be considered as R&D and in facilitating the application process.
CTCON offers advisory services to identify R&D activities within a company's projects. In addition, it provides support in the technical and economic documentation necessary to justify deductions before the Tax Agency. This includes detailed project reports describing the scientific or technological advances achieved and the resources devoted to their development.
On the other hand, companies can also count on the support of consultancy firms specialised in taxation and subsidies, which advise on the processing and optimisation of tax deductions. This comprehensive approach has enabled many construction companies, from SMEs to large corporations, to take advantage of these incentives to improve their competitiveness in the market.
Conclusion
Access to R&D tax deductions represents a strategic opportunity for construction companies, allowing them to reduce their costs and reinvest in innovation. For this process, it is very important to have the support of experts who facilitate the identification of innovative projects and the correct processing of these benefits. In this sense, technology centres and specialised consultancy firms play a key role, helping companies to obtain the tax deductions they are entitled to and fostering the development of a more competitive and sustainable industry.
We want to help you to access these productive improvements and incentives, contact us at info@ctcon-rm.comWe are waiting for you!
