Measures to promote research and development

AID FOR RESEARCH AND DEVELOPMENT PROJECTS

Aid for research and development projects is regulated by the Act on State Aid for Research and Development Projects (OG 64/18) which has been in force since 26 July 2018.

Grantor: Ministry of Economy and Sustainable Development

Implementing body: Croatian Agency for SMEs, Innovations and Investments – HAMAG BICRO

Beneficiaries: legal and natural persons, taxpayers of profit tax and income tax

Type of aid: tax relief for research and development projects and feasibility studies (reduction of the tax base)

A research and development project includes one or more categories of research: basic research, industrial research and experimental development or feasibility study.

The maximum aid intensities to which a beneficiary may be entitled, on any basis under this Act, including other legal bases, may be up to:
a) 100% of the amount of eligible project costs for basic research
b) 50% of the amount of eligible project costs for industrial research *
c) 25% of the amount of eligible costs of the project for experimental development *
d) 50% of eligible costs for feasibility studies.**
* Aid intensities for industrial research and experimental development may in some cases be increased to a maximum aid intensity of 80% of the eligible costs for industrial research and experimental development.
** Aid intensities for feasibility studies may be increased by 10 percentage points for medium-sized enterprises and 20 percentage points for small enterprises

The total amount of support for research and development that the beneficiary may receive per project under this Act is as per the following categories:
a) Predominantly basic research: in Croatian kuna equivalent to a maximum of EUR 300,000.00 per entrepreneur per project
b) Predominantly industrial research: in Croatian kuna equivalent to a maximum of EUR 200,000.00 per entrepreneur per project
c) Predominantly experimental development: in Croatian kuna equivalent to a maximum of EUR 100,000.00 per entrepreneur per project
d) Feasibility studies in the preparation of research activities: in Croatian kuna equivalent to a maximum of EUR 50,000.00 per study.

The maximum total cumulative amount of support for a research and development project that an individual entrepreneur may receive on the basis of this Act and other legal bases is as per the following categories:
a) Predominantly basic research: in Croatian kuna equivalent to a maximum of EUR 40 million per entrepreneur per project
b) Predominantly industrial research: in Croatian kuna equivalent to a maximum of EUR 20 million per entrepreneur per project
c) Predominantly experimental development: in Croatian kuna equivalent to a maximum of  EUR 15 million per entrepreneur per project.
d) Feasibility studies in the preparation of research activities: in Croatian kuna equivalent to a maximum of EUR 7.5 million per study.

The beneficiary receives support through an additional reduction of the tax base for eligible costs of research and development projects or feasibility studies, in accordance with the regulations on profit tax or income tax, in the following total percentages:
a) 200% of eligible project costs for basic research
b) 150% of eligible project costs for industrial research
c) 125% of eligible project costs for experimental development
d) 150% of eligible costs for feasibility study.

Application: Before commencing project activities, entrepreneurs must submit an application for state aid to the Ministry of Economy and Sustainable Development, as the grantor, directly or by mail.

Project implementation period: up to three years from commencement of the project.