The request for Binding Motivated Reports for the application of R&D&I tax deductions continues to grow, year after year
The Ministry of Science, Innovation, and Universities recently published the annual report on requests for Binding Motivated Reports (BMRs) in 2022 for the application of R&D&I tax deductions, corresponding to the fiscal year 2021.
These Binding Motivated Reports are official documents that provide maximum legal certainty, in terms of technical qualification, to companies that have carried out R&D&I projects and are applying incentives such as tax deductions for R&D&I and/or Reductions in Social Security Contributions for Research Personnel. They are issued by institutional bodies such as the aforementioned Ministry of Science, Innovation, and Universities or the Center for Technological Development and Innovation (CDTI Innovation).
The growing interest and need to boost innovation in companies, in data
The figures from the latest published report reveal that the trend of growth in the number, amount, and applicants of these reports continues, with a 2% increase in requests in 2022 compared to the previous year. Specifically, 10,231 requests were submitted, of which more than 8,600 were approved, which also implies a very significant increase in the approval rate, reaching 86% (compared to 80%, 75%, and 70% in previous years). This flow of requests and approvals translates into an estimated deduction amount of around 994 million euros.
More and more companies are opting for the application of tax deductions generated by R&D&I projects and obtaining BMRs for their justification.
Furthermore, Social Security contribution bonuses have increased considerably since 2014, following the entry into force of Royal Decree 475/2014, on reductions in Social Security contributions for research personnel. These bonuses represent an immediate advantage perceived by the employer in the form of lower employer contributions for the researcher.
Technological innovation (TI) projects on the rise
In this growth of BMRs, technological innovation (TI) projects play a significant role, accounting for 65% of the requests compared to 35% for R&D projects. This data highlights the importance of incremental advances, which are more accessible to all types of companies. In any case, although innovation projects dominated in number and budget, R&D projects accounted for a fairly similar deduction amount, at 45% compared to 55% for TI projects.
Regarding the size of the projects, the proportion of R&D and TI was similar or slightly favorable to the latter in small, medium-low, and medium-high projects. In the segment of larger projects (i.e., with budgets exceeding 5 million euros), TI projects significantly outnumbered R&D projects, with a difference of 164 compared to 7.
Moreover, there has been an increase in the number of companies that have requested a Motivated Report for conducting research and development and/or technological innovation activities in 2022, reaching 4,400 companies, of which approximately 65% are SMEs. In fact, the number of SMEs that obtained a BMR grew twice as much as that of large companies. As usual, there was a concentration of large-scale projects in large companies, while SMEs led projects with medium budgets.
This data, combined with the increase in requests, implies a greater utilization of the system by Spanish companies.
Sectoral and territorial distribution of BMRs
- In terms of technological sectors, those related to information technology top the list with over 30% of the total BMRs, followed by the industrial and energy sectors, biotechnology, and agribusiness.
- Regarding distribution by territory, the autonomous communities of Madrid and Catalonia concentrated more than half of the BMRs issued in Spain, with 36% and 22%, respectively. In the case of Madrid specifically, although the number of reports issued increased, its percentage decreased compared to other autonomous communities. The third position was held by the Valencian Community with 13% of the total BMRs issued. In turn, the Basque Country stood out in BMRs for Social Security contributions for research personnel.
Any company can benefit from this instrument by leveraging the R&D&I activities it carries out to finance new projects and obtain a fiscal return safely.
From artica+i, we help you make the most of your R&D&I activity
At artica+i, we work day by day with our clients in their presentation and processing, as well as in advising on the application of the different tax benefits established by Spanish regulations for the innovative activities of companies, maximizing the profitability of their R&D&I.
All this is done while minimizing the risk of refunds and penalties for improper use of fiscal instruments thanks, among others, to tools such as the Binding Motivated Report.
Put yourself in the hands of our Innovation Taxation team to advise you on the correct identification and qualification of the innovation activities you are carrying out and which may be eligible for tax deductions, as well as the most suitable instruments for this purpose.
