Legal Alert – R&D Taxation Incentive and Mining Safety Report
R&D Taxation Incentive
During the tax years 2013 and 2014 it is possible to apply for a temporary tax relief (R&D incentive). The incentive is based on labor costs of research and development activity and it is intended to support product development that aims for growth. All companies, irrespective of their line of business, may utilize the incentive.
The incentive in a nutshell:
- From the taxable business income is deducted 100 percent of R&D related salary costs as an additional deduction. The salary costs are defined not to include employer´s contributions and some other items.
- In practice the company may deduct the R&D related labor costs twice.
- The maximum amount of the additional deduction is 400.000 euros and the minimum 15.000 euros.
- The maximum financial benefit from the incentive is 178.000 euros (98.000 euros for the part of tax year 2013 and 80.000 euros for the part of tax year 2014).
- The basis for the additional deduction is the amount of salaries relating directly to R&D projects.
The utilization of the incentive requires the company´s systematic preparation from the beginning of the tax year from which the company wants to utilize the incentive. Therefore, we recommend you to review your ongoing or planned R&D projects in order to establish the possibilities to utilize the incentive.
Mining Safety Report Deadline Approaches
Furthermore, mining companies operating a mine whose mining district has been granted before the 2011 Mining Act entered into force on 1 July 2011 have an obligation to submit a mining safety report to the Mining Authority (TUKES) by 30 June 2013. The report shall cover how the mining safety regulations provided in the Mining Act have been taken into account in the operation of the mine.
Mining Financing Article Receives Award
Additionally, we are happy to announce, that an article by Borenius Tuomas Tikkanen, on the use of mining assets as collateral (Muun kaivosomaisuuden vakuuskäyttö, available in Finnish only) recently received an award for best article published in Defensor Legis, the law journal of the Finnish Bar Association, in the year 2012. The article addresses the security interests available for the use of movable and immovable mining assets as collateral and the protection of the holders of security interests against third parties, in particular when exploration or mining activity is carried out on a land owned by some other person or entity than the operator. The article may considerably help the industry (exploration and mining companies as well as their financiers) in various practical considerations.
Attorneys at law Borenius has been actively engaged in the preparation of the new Finnish mining legislation. For further information on the mining pledge and the use of mining assets as collateral, please see the articles Panttioikeus uuden kaivoslainsäädännön mukaan (published in Defensor Legis 5/2012) and Muun kaivosomaisuuden vakuuskäyttö (published in Defensor Legis 6/2012) (available in Finnish only).