Deduction for research and development and technological innovation activities

Article 35 of the LIS establishes a tax credit for research and development and technological innovation activities, the calculation of which must take into account the amount of research and development expenditure and, where applicable, investments in tangible and intangible fixed assets excluding buildings and land.Paragraph 1(b) states that the research and development expenditure included in the basis for the deduction must relate to activities carried out or amounts paid for the performance of such activities in Spain or in any Member State of the EU or of the European Economic Area.The same wording is included in section 2.b) for expenditure on technological innovation.

Therefore, as from 1 January 2021, the expenses incurred by Spanish corporate income taxpayers as a result of research and development and technological innovation activities in the United Kingdom will not be taken into account for the calculation of the deduction base for carrying out this type of activity.