RSS
FIC recommends increase in supplementary deduction of R&D related expenses in Romania
Supplementary deduction of research and development related expenses for scientific and technological projects and programmes directly serving key national socio-economic programmes should be increased, according to recommendations of the Foreign Investors Council (FIC) included in the 10th edition of the FIC white book "Regaining Momentum."
"An increase in the supplementary deduction of R&D related expenses for scientific and technological projects and programmes directly serving key national socio-economic programmes and with potential to increase Romanian Intellectual Property assets could be made a priority. This would support the Government's strategy for R&D and Innovation to boost Romania IP assets that are currently well above the EU average. R&D initiatives could also be encouraged and financially supported by consortiums formed between technical universities and industry partners. To facilitate this process, an analysis of best practices applicable in other states in relation to the implementation of R&D incentives would be particularly useful," says FIC.
FIC is also encouraging the elimination of restrictions caused by the use of ambiguous terms and the clarification of the norms for the application of this facility. In addition, FIC considers that strong inter-institutional cooperation between the Ministry of Finance and the Ministry of Education and Scientific Research (Ministry of Education) would bring benefits to the general legislative framework dealing with R&D facilities by bringing clarity and by tailoring it to the business environment's needs.
According to the FIC document, the R&D incentive has been the subject of intense discussion during the past 18 months and specific positive measures have been implemented, such as an increase in the supplementary deduction of R&D related expenses, from 20 per cent to 50 per cent. However in order for this tax incentive to reach its full potential and to represent a real opportunity and attraction for companies performing activities connected to this area FIC considers that changes should be made.
For the following programming period (2014 -2020), Romania's projects to be financed from EU funds should be correlated to a greater extent with public investments supported from governmental sources, so that all public funds, regardless of their financing source, will be allocated according to national development priorities, the Foreign Investors Council (FIC) says in the 10th edition of their "Regaining Momentum" white book.
"Effective coordination of all public funds could be achieved provided that Romania implements multiannual budgetary planning on projects and programmes, in close correlation with the 2014-2020 programming period. The experience gained during the 2007-2013 programming period shows that the Romanian authorities should concentrate their efforts towards a more efficient use of technical assistance resources," reads the document.
According to FIC, from the very start of the next programming period, activities such as evaluation of application forms, preparation of financing contracts, assessment of progress reports and reimbursement claims or the evaluation of operational programmes could be thematically grouped and outsourced to private entities through framework agreements.
This measure, FIC adds, could lead to a decrease in the number of public procurement procedures launched, with positive effects on both the efficiency of the EU funds management mechanism and the absorption process.
"Financial institutions have extensive experience in granting commercial loans and their potential involvement in the absorption of EU funds may help increase the leverage effect on EU funds allocated to infrastructure projects. Besides, as a result of their increased involvement in the EU funds mechanism, public financial resources may be used more effectively to finance the specific priorities of public entities," the document says.
The Foreign Investors Council on Tuesday released the 10th edition of their white book called "Regaining Momentum," in the presence of Romania's President Klaus Iohannis.