Two proposals have been presented
The government appointed investigator recently presented the final report SOU 2026:1, which contains two alternatives for new tax incentives for research and development (R&D). The aim is to make it more attractive for companies to conduct R&D activities in Sweden and thereby stimulate innovation and technological development. The alternative that is being taken forward is proposed to come into force on January 1, 2027, and will complement the current R&D tax credit.
The two proposals are:
1 . An increased cost deduction
2 . A refundable tax credit
Proposal 1: Increased cost deduction
This option would allow companies to deduct an additional 200% of their R&D-related costs from their taxable surplus. This gives a total cost deduction of 300%. Costs for salaries, fees, benefits, and other compensation for work to people working with R&D are covered by the deduction, which applies to everyone who conducts business activities, regardless of company form. The deduction is handled in connection with income taxation.
Proposal 2: Refundable tax credit
The second option gives companies the right to a tax credit corresponding to 20% of the company’s expenses for salaries, fees, benefits, and other remuneration for work performed by persons engaged in research or development. The reduction is deducted from state and municipal income tax as well as state property tax and municipal property tax, and is available to anyone conducting business in Sweden. The portion of the reduction that cannot be used to reduce tax is paid to the company as a tax credit. Such a tax credit shall be tax-free.
Our assessment
The Leyton Group’s market-leading experience of similar incentives in several EU and OECD countries shows that both proposed models have advantages and disadvantages.
Leyton Sweden views the proposals positively as important steps toward a stronger innovation climate, where new tax incentives can create better conditions for companies to invest in research and development. In addition, we welcome a greater focus on simplification and increased predictability for individual companies.
At the same time, two important challenges remain. The first is that the Swedish Tax Agency’s application must be consistent. The second – and even more important – is the interpretation of the definition of research and development, which a previous government investigation (SOU 2025:3) has already found to be very unclear for both companies and the Swedish Tax Agency. This interpretation problem will burden the new incentive, regardless of which alternative is chosen. It is therefore in everyone’s interest that a clear definition is established and applied uniformly.
In the next article, we analyze the practical consequences for companies and share our experience of daily contact with the Swedish Tax Agency in R&D matters.
