January 11 (SeeNews) - Croatia's government adopted on Thursday a draft bill proposing state aid for research and development projects, under which companies investing in these sectors will receive tax relief.
The bill aims to boost investment in research, development and innovation, prime minister Andrej Plenkovic said during a regular session of the cabinet streamed on the government website.
Economy minister Martina Dalic explained that the new legislation will help Croatia meet its target of increasing private-sector investments in research and development to 1.4% of GDP by 2020. Currently, these investments stand below 1% of GDP, while the EU average is above 2%.
"That's why this bill proposes state aid to companies for their research activities in the form of tax relief, by reducing the profit tax base by the real costs of the investment in research and development projects," Dalic said.
The tax relief will range between 50,000 and 300,000 euro ($6,700-48,100/6,700-40,300 euro) per project.
The companies will also have access to EU grants and other kinds of state aid.
The bill has been sent to parliament for approval.
(1 euro=7.44535 kuna)