The Supreme Court is about to make a crucial decision in the dispute between the Ministries of Finance and Science in Spain, which will undoubtedly have a significant impact on the fiscal future of innovation in the country. This dispute centers on tax deductions for innovation, specifically on software development projects. In Spain, technological innovation (IT) projects are eligible for a corporate income tax deduction of 12% of the cost. In order to benefit from this tax reduction, they can rely on a Binding Motivated Report (IMV) issued by the Ministry of Science and Innovation, after evaluation of the project. The problem that the sector has been facing for some years now is that the Treasury has been reviewing these deductions and considering, against the criteria of Science, that many of these software projects cannot be considered innovative. This situation generates uncertainty among companies that invest in technological innovation, since they could face penalties or have to return tax benefits received.
The Supreme Court's decision will be fundamental in clarifying the legal and fiscal framework, providing certainty to both companies and government entities. According to AMETIC data, this is the sector that processes the most MVI each year in Spain, representing almost 68% of the total, with an annual investment of almost 3,000 million euros.
