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Article:

Increased tax deduction for research and development

23 February 2018

Anders Kiærskou , Manager, Tax |

A proposed gradual introduction of an increased tax deduction for businesses’ research and development investments will be precipitated.

An agreement last year between the government and several other political parties proposed to gradually introduce an increased tax deduction for businesses’ research and development investments.

According to the current rules, businesses have the opportunity to carry out an accelerated depreciation of research and development investments in order for 100 pct. of the expenses incurred in the income year to be deducted for tax purposes.

The intention was to increase the current tax deduction for research and development investments from 100 pct. to 110 pct. over several years.

Originally, the intention was for the increased tax deduction to be gradually phased-in from 2019 to 2026.

However, according to a recent agreement between the government and several other political parties, the phase-in will commence already in 2018 to be fully implemented in 2026.

The above article is taken from tax:watch, our electronic English newsletter on Danish Tax and VAT matters. tax:watch is issued on the last Friday of each month and is free of charge. Please sign up here.