R&D Incentives in Denmark:
Improve your company performance through R&D Incentives

What are R&D Incentives?

In 2018, the Danish government introduced new R&D tax deduction of R&D expenses for Danish companies, and gradually increased the deduction from 100% to 130% super deduction for 2020 – 2022 and 108% deduction for 2023 – 2025. The companies can either deduct the full amount or depreciated equal annual amount in the following 5 income years.

The aim of this tax deduction is to promote R&D growth in Denmark and encourage investment in R&D and boost the economic growth. The company can get a research and development tax deduction, irrespective of their R&D projects. This is a clear intention from the government to encourage companies to take benefit of this scheme.

Denmark has now 2 different tax incentives for R&D :

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R&D Tax Deduction, created in 2018 :
101.5% deduction on R&D expenditure for 2018-19, increased to 130% deduction for the expenditures incurred between 2020 and 2022. For 2023-25, the deduction is amounted to 108% and for 2026 and onwards it is 110%. The R&D deduction for the qualifying expenditures are capped to DKK 845 million and DKK 910 million for 2018-20 and 2021- onwards, respectively.
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R&D Tax Credit, created in 2012 :
22% of any deficit related to R&D expenditures, with capped amount of DKK 25 million.

Do You Qualify?

Qualified R&D expenditures related to R&D tax deduction and tax credit are based on the concrete R&D activities, aiming at achieving the acquisition of new scientific or technical knowledge and understanding. The definition of R&D is in line with the OECD Frascati Manual, It includes fundamental research, applied research, development work, and feasability studies.

R&D incentive scenario in an IT company

The company is working on creating a new language based on artificial intelligence to enhance communication between hardware material and software

Wages 5 200 300 DKK
R&D expenses 2 240 000 DKK
Total R&D expenses 7 440 300 DKK

Total extra deduction for year 2022 :

2 232 090 DKK Schedule a free consultation arrow_outward arrow_outward

Our Added Value

As the European leader regarding the R&D incentives Leyton identifies eligible R&D projects and prepares exhaustive supporting documentation throughout the end-to-end process:

Scoping
Document preparation
Submission
Controls.

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Leyton in figures

At Leyton we use our innovation funding expertise to deliver tax relief claims as an end-to-end service. We provide full project management from initial engagement through to benefit. Our tax experts have a wealth of experience working with businesses to help them claim through the R&D tax &SSC relief scheme and will put together the technical report enabling you to submit your claim. Leyton worked with 5,000 clients last year.

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R&D Incentives in Denmark:Improve your company performance through R&D Incentives