New tax deduction to stimulate R&D activities
Sweden has doubled its R&D tax deduction from 10 to nearly 20 per cent and the ceiling for the deduction has been increased significantly. The new conditions provide extra incentive for businesses to expand or relocate R&D activities and will help the region’s clusters maintain their strong innovation capacity, explain Business Region Göteborg’s Andreas Göthberg and Maria Strömberg.
The new incentive was announced in January and it came into effect on 1 April. Available to companies of all sizes and across all industries, it will further improve the possibilities for companies to develop new products and services.
“It will allow companies to increase their innovation development and collaborations, which means they can continue with innovation ventures that are underway, despite the tough times they are experiencing right now,” says Maria Strömberg, head of clusters and innovation at Business Region Göteborg.
“The incentive also gives companies the opportunity to make the most of the changes currently taking place and invest in efforts to adapt, which can provide an advantage,” she adds.
In addition to doubling the tax deduction for R&D employees and consultants to 19.59 per cent, the ceiling for the reduction has also been raised from SEK 230,000 to SEK 450,000 per month.
“This incentive is incredibly important in order to maintain the strong innovative capacity in the region’s clusters, which in turn will future-proof their relevance. In this way they will remain strong internationally even after the crisis,” says Maria Strömberg.
Gothenburg - an important hub for Swedish R&D
Gothenburg is one of the most research-intensive regions in Europe. Every year the region’s companies invest around 35 billion kronor (approx. EUR 3.5 billion) in R&D. In total around a third of Sweden’s R&D investments in the private sector are made in the Gothenburg region. The region also attracts a large share of the highly educated labour force across many areas.
“Gothenburg is a key hub for Swedish R&D and we have leading expertise, within for example, automotive, life science, ICT, logistics and urban development. This new deduction provides extra incentive for businesses to expand or relocate R&D activities in and to Sweden. It's positive for both the region and its businesses, both in dealing with the effects of COVID-19 and for long-term competitiveness,” says Andreas Göthberg, head of FDI at Business Region Göteborg.
Maria Strömberg explains that innovation is not only important, it’s crucial for the future competitiveness of companies and sectors.
“It drives the development of new solutions and technologies, as well as new ways of working and behaviours. It is also via innovation and collaboration that new value is created – both for companies and in the long run for individuals and society. It is with the help of innovation that we can find solutions to the global sustainability goals.”
The deduction is calculated in two parts:
- 9.59% of salary deducted from statutory employer contribution (max amount SEK 450,000 or approximately EUR 45,000 per month)
- 10% of salary deducted from payroll contribution (max amount SEK 469,240 or approxiamately EUR 46,924 per month)
To learn more about this tax deduction visit the Swedish Tax Agency's website: Skatteverket - Forskningsavdrag (in Swedish)
- Maria Strömberg, head of clusters and innovation at Business Region Göteborg
- Andreas Göthberg, head of FDI at Business Region Göteborg
- Investments in R&D at record levels
- Why Gothenburg - a hotspot for innovation and entrepreneurship
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We have compiled information about the current corona situation in Sweden and the actions being implemented to support businesses in the Gothenburg region and Sweden as a whole. Access the PDF to learn more: Extended support to companies during the COVID-19 pandemic (version 4 May)
We have also compiled information for individuals who are living and working in the Gothenburg region during the pandemic. Access the PDF to learn more: Living and working during the COVID-19 pandemic (version 4 May)