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Practical manual for Income Tax 2021.

C. Exclusions and prior assessment of expenses

Exclusions

Regulations: Art. 35.3 LIS

The assumptions that are not considered research and development activities or of technological innovation are the following:

  1. Activities that do not involve significant scientific or technological novelty . In particular, routine efforts to improve the quality of products or processes, the adaptation of an existing product or production process to the specific requirements imposed by a customer, periodic or seasonal changes, except for textile and footwear, tanning, leather goods, toy, furniture and wood industry samples, as well as aesthetic or minor modifications of existing products to differentiate them from similar ones.

  2. Industrial production and service provision or distribution of goods and services activities . In particular, the planning of productive activity: the preparation and start of production, including the setting of tools and other activities other than those referred to in numbers 1 to 4 of letter b) of section 2 of article 35 of the LIS ; the incorporation or modification of facilities, machines, equipment and systems for production that are not affected by activities classified as research and development or innovation; the solution of technical problems of interrupted production processes; quality control and standardization of products and processes; social science research and market studies; the establishment of networks or facilities for marketing; the training and development of personnel related to such activities.

  3. The exploration, survey or prospecting of minerals and hydrocarbons.

Preliminary assessment of expenses corresponding to scientific research or technological innovation projects

Regulations: Art. 38 Regulation IS

In accordance with the provisions of article 38 of the Regulation of the IS , approved by Royal Decree 634/2015, of July 10, persons or entities that intend to carry out scientific research or technological innovation activities may request the tax authorities to assess, in accordance with the rules of the Corporate Tax and, on a prior and binding basis, the expenses corresponding to said activities that they consider eligible for this deduction, with the aforementioned regulatory provision establishing the content of the request and the procedure to be followed.