Binding Motivated Report

Motivated Reports are a tool provided by the Ministry of Science and Innovation (MICINN) or the Center for Industrial Technological Development (CDTI). They serve to classify activities as R&D or Technological Innovation, and constitute a binding document for the Tax Administration.

There are alternative methods to the Reasoned Report to obtain assessments from the Tax Administration. These assessments, obtained through other methods, cannot be appealed, so a certain risk is incurred when classifying projects as R&D or IT activities.

The Motivated Report is the recommended method when there is a high degree of uncertainty regarding the identification and assessment of R&D or IT activities. This is a report that provides full legal certainty when applying tax deductions for R&D&i before the Tax Administration. It links to the scientific-technological qualification, and includes an identification of the associated/budgeted expenses.

The following diagram shows all the possible ways to apply deductions for R&D&i.

Binding Motivated Report: Issuance Procedure

The administrative procedure for issuing Reasoned Reports includes the submission of an application addressed to the competent body, a project report, a technical report and associated forms and forms.

Technical reports must be issued by an entity accredited by ENAC for this purpose. In this way, they provide confidence to the system for tax purposes, in relation to technical and scientific competence in the different areas of R&D&i. They also ensure independence and impartiality, as third-party entities.

These technical reports are not binding on the competent body, but they do constitute an important reference.

Motivated Report Request

Currently, it is possible to submit applications and communicate electronically with the Ministry of Science, Innovation and Universities, with the purpose of improving the effectiveness, speed, comfort and safety of the procedure.

The ministry issues a Motivated Report on each of the applications submitted, breaking down the activities related to Research and Development and those related to Technological Innovation. It also identifies the expense/budget that could form part of the deduction base.

The notification of the Reasoned Report is carried out electronically to the interested party. A copy is also sent to the Tax Administration.

Types of Motivated Report

On the MICIU website there is a description of the different types of Reasoned Report requests, along with the application deadlines. The types of technical reports available are also indicated.

1. Technical reports for tax deductions

o  Type A Motivated Reports

• Technical report on content and first execution: includes the evaluation of the project according to its technical nature, formal aspects, expenses incurred and their coherence.
• Technical monitoring report: evaluates the annual execution of a project planned for several years.

o Type B and C Motivated Reports

• Technical report of ex ante content: Evaluation of a project prior to its execution. It allows companies to have a guarantee of the tax deductions to which they can opt before starting the project.

1. Technical reports for Social Security bonuses for research personnel
   

o   Type D Motivated Reports

• Technical report: certifies which people are dedicated exclusively to R&D&i tasks in the company.

o Regulations on Reasoned Reports

• 2003: Royal Decree 1432/2003, of November 21.
• 2004: Royal Legislative Decree 4/2004, of March 5.
• 2007: Bonuses, repealed. Royal Decree 278/2007, of February 23.
• 2008: Sample books. Law 4/2008, of December 23.
• 2013: Entrepreneur Support Law, Law 14/2013, of September 27.
• 2014: Bonuses. Royal Decree 475/2014, of June 13. Corporate tax law. Art. 35 R&D&I. Art. 23 Patent. Law 27/2014, of November 27.
• 2015: Innovative SME Ministerial Order. Order ECC/1087/2015, of June 5.
• 2017: CEA-RDE change. RDE-01 Rev. 2 December 2017
• 2019: RDE version 3. Manual for ECs of the MCIU. RDE-01 Rev. December 3, 2018.

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