Reinforced R&D deduction from April 1, 2020

At present, there is a tax incentive through deduction of employer’s contributions for employees who work within research and development. In order to further improve the opportunities for companies to develop new products and services, the government has now announced an additional reduction of employer’s contributions for R&D employees. In addition, a significant enhancement of the ceiling for the R&D deduction is made.

The R&D deduction imply that companies that have employees who work with research and development can pay lower employer’s contributions. The deduction currently amounts to 10 per cent of employer’s contributions and the ceiling for a company or a group of companies is SEK 230,000 per month. The new proposal from the government means that the R&D deduction will instead be doubled to 20 per cent. Furthermore, the ceiling for the deduction is raised to SEK 450,000 per month, which means that the maximum deduction per company or group of companies increases from about SEK 2.8 to 5.4 million per year.

To be eligible for the R&D deduction, the employee must devote himself or herself to systematic and qualified research or development for commercial purposes for at least 75 per cent of his/her working hours and at least 15 hours of his/her actual working hours during the calendar month. If the company meets the requirements for deduction, it is possible to request a deduction retroactively six years back (the tax year and the five previous years). The new reinforced rules apply from 1 April, 2020.