A wake-up call for companies claiming R&D tax relief with no specific approach
The SOU 2025:3 report, released on January 15, 2025, is the conclusion of a one-year investigation into Sweden’s R&D tax relief framework, revealing critical risks and pressing challenges that demand attention from companies currently claiming the deduction. While the report offers promising solutions for the future, it also sheds critical light on the current situation, drawing on insights from both Skatteverket and market feedback. For companies currently claiming R&D tax relief, this report serves as a crucial wake-up call, highlighting significant risks, which should lead to actions to secure their claims.
Increasing number of audits
The report mentions that over the years, Skatteverket’s approach in assessing R&D deductions has evolved; with recent years witnessing an increase in the number of audits. Presently, the agency allocates around 40,000 working hours annually —equivalent to 27 FTEs — specifically for auditing R&D deductions. There are no official statistics on the frequency of full or partial denial of R&D claims following audits. However, the report mentions that Skatteverket estimates that around 80-90 percent of audits result in some form of change.
This high rate of changes should alarm companies that are currently making claims on their own without proper technical and financial justification.
Complex rules
The SOU 2025:3 report underscores that both companies and Skatteverket case officers find the R&D deduction rules challenging to apply. From the outset, the legal definitions of “research” and “development” have differed significantly from the common business interpretations, creating a gap in understanding and compliance.
According to Skatteverket case officers:
- Determining whether a company utilizes research results in its development work is inherently difficult.
- Assessing how closely development activities must align with research findings and verifying that development is genuinely research-based presents ongoing challenges.
- A frequent reason for denial is insufficient technical documentation to substantiate the claim, especially when audits cover accounting periods from several years prior.
A significant proportion of companies could be at risk
One of the most concerning points in the report is the conclusion that “There is also reason to assume that a large proportion of companies that have not been audited are also not entitled to R&D deductions.” This suggests that several companies that have not yet faced an audit may be at significant risk of non-compliance.
Moreover, it is important to highlight that even companies that were previously audited can be audited once more for the same projects for different periods.
Time to act
Given these findings, companies claiming R&D tax relief should take proactive steps to review their claims to:
- Secure current claims and prepare for potential audits by ensuring all technical documentation and compliance requirements are met.
- Optimize tax relief opportunities by correctly interpreting complex rules and maximizing eligible deductions.
The report provides a clear picture of the current situation and the underlying reasons for change, highlighting key risks such as the high likelihood of reassessment during audits, the complexity of compliance with R&D definitions, and the substantial number of companies potentially at risk due to inadequate documentation.
Seeking guidance from experienced professionals specialized in R&D tax relief with a technical background can be valuable in navigating the complexities of the tax relief framework, helping to ensure compliance and identify opportunities for optimization.
