Forms of R&D support available in the Czech Republic
Research and development (R&D) are key factors for economic growth and competitiveness. In the Czech Republic, support for R&D is one of the objectives of its subsidy policy that aims to foster innovation and technological progress. Support is provided not only through direct subsidies but also in the form of tax allowances. In the article below we look at both these aspects and present selected subsidy programmes currently available.
For support provided as subsidies, it is now possible to obtain aid for R&D activities, e.g., under the Operational Programme Technology and Applications for Competitiveness. The Applications programme may be of particular interest for large enterprises, as it allows support for industrial research and experimental development projects. Two calls are currently expected to be announced under the Applications programme: Call II, to be announced on 12 December 2024, will specifically focus on software development, and Call III will support industrial research and experimental development on a more general level and is expected to be announced on 29 November 2024. Importantly, large enterprises collaborating with an SME on a project may also apply for support under this programme.
Support through subsidies is also available from the programmes of the Technology Agency of the Czech Republic (TA CR). The THÉTA 2 programme provides support for activities in applied research and innovation in the energy sector. As we reported on in more detail here, the second call to participate in this programme is currently underway. Furthermore, the third call to participate in the TRANSPORT 2030 programme, providing support for R&D activities in transport, is expected to be announced at the turn of the first and the second quarter of 2025. Until now, the TREND programme has been one of the TA CR’s most popular programmes, providing aid for research and development in general. However, the acceptance of applications for the last call under this programme closed on 14 August 2024.
In addition to subsidies, other important instruments for supporting R&D are R&D allowances. This instrument allows companies to deduct R&D costs from their tax base a second time in the tax calculation as a tax allowance, which can significantly reduce their tax liability. This means that companies investing in R&D can claim this allowance at 100% of their incurred R&D costs or, if R&D costs increase year on year, up to 110% of the incurred R&D costs. The allowance can be claimed in the current period or in the following three taxable periods. The allowance covers costs associated with research and development activities, such as researchers' salaries, costs of material, costs of selected services, and other direct costs.
Support for R&D is a key factor for the future growth of the economy and the competitiveness of the Czech Republic. The combination of direct subsidies and tax allowances provides companies with a range of options to finance their research and development activities.