Skip to main content
Practical manual for Income Tax 2023.

B. Deduction for technological innovation activities (art. 35.2 LIS)

Concept of technological innovation

Regulations: Art. 35.2.a) LIS

Technological innovation is considered to be any activity that results in a technological advance in obtaining new products or production processes or substantial improvements to existing ones. New products or processes are considered to be those whose characteristics or applications are substantially different from those that existed previously, from a technological point of view.

This activity will include the materialisation of new products or processes in a plan, scheme or design, the creation of a first non-marketable prototype, initial demonstration projects or pilot projects, including those related to animation and video games and textile samples, in the footwear, tanning, leather goods, toy, furniture and wood industries, provided that they cannot be converted or used for industrial applications or for commercial exploitation.

Deduction base

Regulations: Art. 35.2.b) LIS

1. Technological innovation activities whose expenses are included in the deduction base

The basis for the deduction for technological innovation activities will be the amount of expenses for the period corresponding to the following concepts:

  1. Technological diagnosis activities based around the identification, definition and orientation of advanced technological solutions, regardless of their results.

  2. Industrial design and engineering for production processes, including the design and elaboration of plans, drawings and supports aimed at defining the descriptive elements, technical specifications and functioning characteristics required for the manufacturing, testing, installation and use of a product, as well as the elaboration of textile samples, in the footwear, tanning, leather goods, toys, furniture and wood industries.

  3. Acquisition of advanced technology in the form of patents, licenses, know-how and designs.

    Amounts paid to people or entities related to the taxpayers do not give way to the right to the deduction.

    The base corresponding with this concept cannot exceed 1 million euros.

  4. Acquisition of the certificate of compliance with quality-assurance standards, corresponding with ISO 9000, GMP or similar, without including expenses incurred for implementing said standards.

2. Delimitation of technological innovation expenses

Technological innovation expenses are considered to be those incurred by the taxpayer as long as they are directly related to technological innovation activities, are effectively applied to carrying them out and are specifically individualized by project.

The technological innovation expenses that form the basis of the deduction must correspond to activities carried out in Spain or in any Member State of the European Union or the European Economic Area.

Likewise, amounts paid for the performance of such activities in Spain or in any Member State of the European Union or the European Economic Area, on behalf of the taxpayer, individually or in collaboration with other entities, will be considered technological innovation expenses.

The base of the deduction will be reduced by the amount of the subsidies received to promote said activities, and are taxed as income during the tax period.

Percentage of deduction

Regulations: Art. 35.2.c) LIS

In this case, the deduction percentage will be 12 per 100 of the expenses incurred in the tax period for this concept.