Question for written answer
to the Commission
Rule 130
Alfred Sant (S&D)

Subject: Small companies’ R&D costs in the CCTB

The Proposal for a Council Directive on a CCTB published on 25th October 2016, in its Article 9(3), introduces a yearly super-reduction for R&D expenses, which amounts up to a 100% deducibility if the company qualifies as a start-up. Such measure aiming at driving private entities to invest in real economy is appropriate at times where the current investment gap is one of the main sources of economic weakness.
In reality, such tax breaks need special care to ensure that they have a positive impact on real economy: firstly, because MNEs carry out most R&D activities in comparison to SMEs and secondly, because the difficult part for a start-up is to start making profits before even being able to proceed to tax deductions.

Thus:
– Will the Commission strengthen anti-abuse regulation to avoid unjustified tax deductions?
– Given that SMEs and MNEs are not on an equal footing concerning the scale and the intensity of R&D investment, how will the Commission guarantee that these large additional tax deductions will not be giving MNEs further gains to the detriment of smaller companies?
– Could the Commission foresee a complementary scheme for start-ups where the deduction for R&D expenses could apply prospectively?