The government has adopted a decree introducing regional tax breaks for companies investing in research and development. The tax breaks will apply to companies in the least developed regions and will be available for the 2007 fiscal year, Finance Ministry State Secretary Andrej Sircelj told the press after Thursday's session of the cabinet.
According to Sircelj, the tax breaks are either 10% or 20% depending on the GDP of the region. The higher rate will be effective in regions where GDP lags behind the national average by over 15%, while companies in regions lagging behind the Slovenian average by up to 15% will be able to claim the 10% break.
The break will come on top of a general tax break that companies can claim on investment in research and development.
The number of companies that have claimed breaks for investment in research and development is on the rise: in 2005 it was 222, whereas last year it rose to 548. In 2006, such claims were worth EUR 60m.
According to Lavric, the main aim of the tax break is to give companies an additional incentive to invest in raising value added, with special emphasis on companies in less developed regions.
The tax breaks apply both to in-house and outsourced research and development, Sircelj said. He said that companies will this year for the first time be given the possibility for claiming tax breaks on licenses used in R&D.
Slovenia has four statistical regions that lag behind the Slovenian average GDP by up to 15% and six regions whose development gap exceeds 15%. Only two regions exceed the national average.
Slovenia got clearance from the EU for the regional tax breaks in August.
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