R&D&i Measures Amid COVID-19 Pandemic

R&D&i Measures Amid COVID-19 Pandemic

The Spanish Ministry of Science and Innovation, amid the coronavirus crisis, has launched urgent measures seeking innovation. Companies meeting this requirement may be granted up to €500 million.

Thanks to these extraordinary measures SME’scan apply for aid without having to provide guarantees and the project can be approved faster than before. 

The State Administration has urgently launched, through the Spanish (Centre for Industrial Technological Development) CDTIthese extraordinary measures, which have immediate implementation

It aims at supporting the maintenance of high value-added activities and at creating competence in order to reactivate the economy regarding business innovation. 

This measures are mainly translated into warranty exclusionwhen applying for grants concerning R&D&i projects; into decreasing the management and approval time of a given projectinto expanding the LIC-A nationwide; and into extending deadlines for justification in partially reimbursable aid (RD 463/2020 

Regarding warranty exclusion: 

The CDTI will decrease the number of guarantees requiredin all R&D&i projects approved as of 14 March 2020. 

SMEs and mid-cap companies won’t be required to offered guarantees, as long as the company-project meets with the minimum economic solvency requiredby the CDTIand under the following terms: 

  • Small companies:warranty exclusion of up to €500,000. 
  • Medium companies: warranty exclusion of up to one million euros. 
  • Mid-cap companies: warranty exclusion of up to three million euros. 

What is more, if the R&D&i activity is related with products needed during the COVID-19 crisis, the aforementioned quantities increased:  

  • Small companies: warranty exclusion of up to one million euros. 
  • Medium companies: warranty exclusion of up to two million euros. 
  • Mid-cap companies: warranty exclusion of up to three million euros. 

The Spanish Department of Health establishes what are thein-demand products during this pandemic. These are: face masks, PCR diagnostic kits and included materials, rapid diagnostic kits (antigen detection), swabs, protective goggles, nitrile gloves, disposable and waterproof gowns… 

Moreover, as long as this crisis last and it effects on the economy, the CDTI will implement a rapid management routefor all those projects aiming at helping companies maintain strategic investments and so reduce, at least a little bit, the negative effect. 

The CDTI will continuously assessR&D&i projects with partially reimbursable grants. The CDTI will also suggest increasing the frequency of meetings online ofits Board of Directors, in order to speed-up its approval process and the awarded grants in a time of economic slowdown. 

This fast track will prioritize those projects which provides the in-demand products needed, and already mentioned, during this crisis. 

The Spanish Association for the Promotion of R&D+i Financing (AFIDI)states that in “AFIDI we’re also afraid that this will be another ‘lost’ year for the Spanish innovation, that in these common battle against the pandemic and to solve the immediate economic problems we forget to work towards building a more competitive and prosperous future for all through innovation.  

For that reason, we suggest some measuresthat merge attending the most immediate needs with a focus on the future and innovation”. Amongst those measures, we highlight the following: 

Measures that generate liquidity and maintain a commitment to innovation: 

  • Increasing the Social Security allowance of R&D&i staff from 40% to 75% 
  • Corporate tax cut during the Fiscal Year 2019 of the limit of application of the tax deduction on the full amount. 
  • Advance payment of grants… 

Measures that foster innovation, without needing significant short-term liquidity input: 

  • Make compatible for all SME’s the Social Security allowance of R&D&i staff with the R&D&i tax deductionson corporate tax. 
  • Remove face-to-face paperwork submission, this includes approval of aid, tax incentives for innovation and justifying minimums, that must be replaced for an online submission. 
  • Issuing before established the binding reports for the 2019 Fiscal Year, as well as the resolution of financing programmes and instruments, including both national and regional, before August. 
  •  Having the same budget but in advance can be important in order to keep innovating, investing and the activity of many companies. 

AFIDI states that “these measures suggested and others that will soon be also suggested by the Government will allow Spanish companies to face this crisis in the short-termwhile not stopping working on their and our future, building a more prosperous and innovative society”. 

Sources: El Periódico, La Razón 

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