9.9.2.2.2. For expenses and investments in research and development activities and technological innovation

FOR EXPENDITURES AND INVESTMENTS IN RESEARCH AND DEVELOPMENT ACTIVITIES AND TECHNOLOGICAL INNOVATION
Deduction percentages

1) The performance of research and development activities will entitle the taxpayer to a deduction of the full amount of 25 percent of the expenses incurred in the tax period for this concept.

In the event that the expenses incurred in carrying out research and development activities in the tax period are greater than the average of those incurred in the two previous years, 25% will be applied up to said average, and 42% on the excess with respect to it.

In addition to the deduction applicable in accordance with the provisions of the preceding paragraphs, an additional deduction of 17 percent of the amount of personnel expenses corresponding to qualified researchers assigned exclusively to research and development activities will be made.

To determine the basis for the deduction, the amount of research and development expenses will be reduced by 65% of the subsidies received for the promotion of said activities and attributable as income in the tax period.

2) For investments in tangible and intangible fixed assets, excluding real estate or land, provided that they are exclusively used for research and development activities, they will give rise to a deduction of 8 percent .

This deduction will be incompatible for the same investments with the rest of the deductions applicable by Income Tax payers.

The elements in which the investment is made must remain in the taxpayer's assets, except for justified losses, until their specific purpose in research and development activities is fulfilled, unless their useful life is shorter.
FOR EXPENDITURES ON TECHNOLOGICAL INNOVATION ACTIVITIES
The implementation of technological innovation activities will entitle you to a deduction of 12 percent.

Deduction base

The base of the deduction consists in the amount of the expenses during the period of technological innovation activities that correspond with 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 production process engineering, which will include the conception and preparation of plans, drawings and supports intended to define the descriptive elements, technical specifications and operating characteristics necessary for the manufacture, testing, installation and use of a product, as well as the preparation of textile samples, for the footwear industry, tanning, leather goods, toys, furniture and wood.
3. Acquisition of advanced technology in the form of patents, licenses, know-how and designs. Amounts paid to persons or entities linked to the taxpayer will not give rise to the right to deduction. The base corresponding to this concept may not exceed the amount of one million euros per year.
4. Obtaining the certificate of compliance with quality assurance standards in the ISO 9000, GMP or similar series, not including the costs corresponding to the implementation of said standards.
Expenses 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.

To determine the basis for the deduction, the amount of expenses in technological innovation activities will be reduced by 65% of the subsidies received for the promotion of said activities and attributable as income in the tax period.

CONCEPT OF RESEARCH AND DEVELOPMENT (art. 35.1.a LIS)

research will be considered as the original and planned inquiry that seeks to discover new knowledge and a greater understanding in the scientific or technological field.

development is considered to be the application of the results of research or any other type of scientific knowledge for the manufacture of new materials or products or for the design of new production processes or systems, as well as for the substantial technological improvement of pre-existing materials, products, processes or systems.

The materialization of new products or processes in a plan, scheme or design, as well as the creation of a first non-marketable prototype and initial demonstration projects or pilot projects will also be considered research and development activity. As long as they cannot be converted or used for industrial applications or for commercial exploitation. The design and production of samples for the launch of new products will also be included.

The development of advanced software provided that represents significant scientific or technological progress through the development of new theorems and algorithms or through the creation of new operating systems and languages, or provided that it is intended to facilitate access to information society services by disabled people, is considered to be a ##1## research and development activity. Routine or usual activities related to the software are not included.

In addition to the above, the exclusions applicable to the deduction must be taken into account.

CONCEPT OF TECHNOLOGICAL INNOVATION (art. 35.2 a) LIS)

Technological innovation will be considered as the activity that results in the obtaining of 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 materialization of new products or processes in a plan, scheme or design, as well as the creation of a first non-marketable prototype and initial demonstration projects or pilot projects, and textile samples, from the footwear industry, tanning, leather goods, toys, furniture and wood. As long as they cannot be converted or used for industrial applications or for commercial exploitation.

In addition to the above, the exclusions applicable to the deduction must be taken into account.

RESEARCH AND DEVELOPMENT AND TECHNOLOGICAL INNOVATION: EXCLUSIONS

EXCLUSIONS (art. 35.3 LIS)

Activities consisting of:

Activities that do not involve significant scientific or technological innovation.

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.
The activities of industrial production and provision of services, or distribution of goods and services.

In particular, the planning of productive activity; the preparation and start of production, including the setting of tools and other activities other than those described in letter b) of section "deduction base and percentage" corresponding to the deduction for expenses in technological innovation activities, 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, market studies and the establishment of marketing networks or facilities; the training and development of personnel related to such activities.
The exploration, survey or prospecting of minerals and hydrocarbons.