What is a research and development loan?
Research and development (research and development) is a technological development phase that brings an increased risk of business compared to production costs compared to production costs; However, if technological and medical progress should continue, this is an indispensable activity. For some businesses, research and development activities are necessary for continuing prosperity. In an effort to support and support new developments, many governments offer research and development loan for individual and business taxes. For tax purposes, the loan is different from the deduction. The deduction of the tax is an expenditure that is deducted from income before calculating the tax liability. For example, if a person or company has a modified gross income (AGI) in the amount of $ 50,000 in the US (USD) and deductions of $ 15,000, the deductions are deducted from AGI in order to determine taxable income and tax liability. On the other hand, a tax credit is to reduce tax liability, so if the tax liability is $ 5,000 and there is a research and development credit of 1,500 USD, then the tax is reduced to $ 3,500.
In the United States, the Federal Government offers a research and development loan for technological activities in the field of research and development in many applications such as energy development, medical progress and general prescription drugs. Generic drugs are the bioequivalent of drugs already approved by food and drug administration (FDA) that have expired. This general medication credit does not apply to the development of new drugs. The US tax code offers a number of options to apply credit, and anyone who qualifies for a research and development loan should calculate it with all methods to find out which ones are best.
USA generally do not offer credits for most of the new development of drugs because patent laws allow pharmaceutical companies exclusively the rights to any drugs that develop for a sufficiently long time to recover research and development and implementationSk profit. However, there is a tendency for companies to conduct drug research only for diseases that are distributed enough to make their risks that costs are not obtained. As a result, little research may be attempted to find the treatment of rare diseases or conditions. In the US, rare diseases are defined as a condition that affects 200,000 people or less in the country, or as a disease that affects more than 200,000 people, but for whom it is not reasonable to expect society to receive its expenses. A special research and development loan, called Orphan Drug Credit, was developed to support this type of research.
Some states in the US also offer a research and development loan for a certain designated activity. For example, in Colorado, taxpayers who invest in research are available for tax on research and development of experimental activities in one of the state's business zones. Enterprise zone is an economically depressed area designated by the state for which a special tax is treatedEntrying companies to help develop businesses and create jobs in this area.
In addition to the US, Australia, Austria, Canada, France, Germany, Ireland, Mexico, the Netherlands, New Zealand, South Africa and the United Kingdom are offered. In some cases, they are not credits, but take the form of a special deduction or accelerated method of depreciation of capital investments made for research and development purposes, while countries offer a real credit that applies to tax liability. In some regions, such as Canada, they get the most attractive credits into small and medium -sized companies. Recent tax law changes in France have led to this country offering some of the best credits for large corporations. Other countries, such as Brazil, do not offer national research and development credit, but have credits for research and development at the state or provincial level.