Denmark offers a range of attractive features for R&D-orientated companies, some of which will be elaborated on in the following.
Special tax regime for foreign key personnel
A special taxation scheme applies for researchers and key employees (specialists and top management) who are recruited abroad and are employed by a Danish company or research institution.The scheme implies that highly paid employees and researchers recruited abroad may, subject to a number of conditions, choose – for a period of not more than 36 months – to be taxed at the rate of 25 per cent of their remuneration with no allowances – instead of paying normal income tax.
Industrial PhD Programme (ErhvervsPh.D.)
Companies located in Denmark can obtain a grant to employ a PhD. The company must be professionally and economically capable of supporting a three-year focused research and development project. The university can be non-Danish but it must have an official approval to educate PhD’s.The grant from the Danish state amounts to 50% of the salary of the employee (but no higher than EUR 60,400 over a three-year period). Furthermore contributions to expenses such as conferences, courses and travel activity can be granted. There are no requirements regarding nationality.
Deduction of R&D expenses
R&D expenses are normally fully tax deductible. The company can choose to either deduct the full amount the year the expenses has been held alternatively amortisation may be apportioned in equal instalments over a period of the year the expenses has been held and the four following years. Typically the deductible expenses are related to salaries, raw material, and premises. But also expenses related to R&D carried out by other organizations and expenses related to acquiring intellectual property rights are deductible. Capital expenditure related to machinery and equipment, which is being used exclusively for research and development purposes, can be fully deducted in the year in which it is acquired
EUREKA
Danish companies participating in EUREKA-projects can apply for venture capital at VaekstFonden. EUREKA-projects are cross-border collaborations between companies in EU countries or other EUREKA countries including Iceland, Norway, Russia and Turkey. EUREKA-projects must be aimed at developing high-tech products; processes, systems or services and involve companies from at least two different EU or EUREKA participating countries.
Support from the European Union
The European Union’s Seventh Framework Programme (FP7), effective from January 1st 2007, for Research and Technological Development funds collaborative research, technological development and demonstration activities designed to improve the competitiveness of European industry. The overall goal of FP7 is to contribute to making EU the world’s leading research area, and the program is designed to respond to the competitiveness and employment needs of the EU. The programme is structured via four specific programs - Cooperation, Ideas, People, and Capacities and will give € 54 billion in the period 2007-2013. The projects must be related to research and development and involve European-based companies and/or research institutions.
Support for innovation in the food sector
The Danish Innovation Law offers possibilities for granting financial support to the development of ideas, research and product development in the fisheries and agricultural sectors, and for the processing and refinement of agricultural and fishery products. So far, a variety of projects ranging from organic chips to robots that improve the working environment in food production have received financial support.
The purpose of the Danish Innovation Law is to strengthen the development and research within the fisheries and agricultural sectors through support to pioneering projects.
For more information, download the fact sheet ”Research & Development” here
