Clarifications provided by GSRT on eligible costs of R&D expenses

Clarifications provided by GSRT on eligible costs of R&D expenses

The above eligible costs of scientific and technological research, as same are laid down in Joint Ministerial Decision 109343/I2/GG B 2351-11.07.2017, are classified as follows:

 

Expenditure Category 1: “Remuneration of Salaried Personnel”

This category includes the salaries of any staff employed for the implementation of the project concerned. This type of expenditure relates to: (a) Any full-time staff involved in the project, employed under employment contracts (permanent staff, staff employed on the basis of full- or part-time employment contracts of indefinite term) and (b) Any extraordinary staff required for the implementation of the project, employed under employment contracts of definite term (either on a full- or a part-time basis).

As a rule, the remuneration of the staff involved in the project is calculated based on (i) the total actual period of their involvement in the project and (ii) the gross hourly cost of employment of that staff, incurred by the employer. The gross hourly cost of employment is calculated by dividing the latest documented annual gross cost of employment, as same is defined in the applicable laws, by the total number of productive hours (1,720).

It is noted that the total number of technical and administrative staff employed by the company may not exceed 20% of the project’s authorised research team.

The additional documentation required for the certification of staff remuneration, per level, consists in the following:

• The announcements of appointment issued in respect of the members of the project team, including each member’s resume. With respect to extraordinary staff, the relevant employment contract of definite term will have to be submitted.
• Detailed payroll lists indicating the gross monthly remuneration of the members, and the respective social security contributions, withholdings and any additional benefits. It is noted that additional benefits, e.g. remuneration for overtime work/ additional employment, must be indicated distinctively.
• Monthly global time sheets indicating, in respect of each individual concerned, the total hours of actual work per day, in respect of each project or other activity, signed by the employee concerned and the company’s manager. Where an individual is involved in the project throughout his/her employment period, no time sheets are required, but merely a company certificate certifying his/her full-time and exclusive employment as per the relevant decision of the company’s management.
• Salary payment receipts, essentially in the form of bank deposit certificates, and Item 53 accounting entries in respect of each member of the project team.
• Evidence of submission of final Salaried Services Tax (SST) returns, including the relevant release notes and Item 54 accounting entries.
• Evidence of submission of Analytical Periodic Statements (APS), including the relevant release notes and Item 55 accounting entries. Due to their large volume, APSs will be forwarded to the service only in electronic form.
• Where any members of the project team are liable to pay any additional social security contributions to other social security funds (e.g. TSMEDE, TSAY etc.), all relevant payment certificates, release notes and accounting entries will have to be submitted.
• Work progress reports, signed by the members of the project team and the project manager, with thorough reference to the physical scope implemented and the respective deliverables.
• Analytical general ledger of the separate accounts held for project staff expenses (e.g. 60.00.00.0080 “Fees of Salaried S&T Staff», 60.03.00.0080 “Employer Contributions for Salaried S&T Staff” ). Payroll information must be recorded on a monthly basis in respect of each project team member.

 

Expenditure Category 2-1: “Fees of Contracted Associates”

This expenditure category includes costs relating to the assignment of research work to individuals by means of service agreements.

Eligible subcontracting expenses, for the purposes of the research project concerned, (involving natural persons or legal entities) may not exceed in total 70% of the research project’s budget.

The additional documentation required for the certification of fees paid to contracted research staff consists in the following:

• Copies of the related works contracts, setting out clearly the physical scope of work to be implemented, the contractorship fee, the contract term and the final verifiable deliverables. Where a contract includes multiple activities (participation in research projects, general provision of services etc.), there must be a clear indication of the physical scope, fees and deliverables of each activity.
• Evidence of certification of the contracts by the competent Tax Office.
• Payment documentation (invoices or other accounting records of equal probative value), in the form prescribed in the applicable Greek laws. Each document shall clearly indicate the particular task concerned and must provide a clear allocation of fees, in the case of multiple tasks/projects.
• Evidence of payment through use of a bank payment system, and Item 53 accounting entries in respect of each member of the project team.
• Evidence of submission of Declarations of Fees from Liberal Professions (FLP), including the relevant release notes and Item 54 accounting entries.
• Work progress reports, signed by the members of the project team and the project manager, with thorough reference to the physical scope implemented and the respective deliverables.
• Analytical general ledgers of the separate accounts in the form of item 61.00.00.0080 “Fees and Expenses of S&T Professionals” kept in respect of the project’s expenses.

Where the individuals concerned fall within the scope of Law 4387/2016 [Article 39(9)], evidence of payment of their social security contributions is required for the certification of the expenditure. Moreover, where the individuals concerned are VAT exempted, an exemption certificate of the competent Tax Office is also required.

 

Expenditure Category 2-2: “Consultants’/Subcontractors’ Fees”

This expenditure category includes fees relating to research work contractually assigned to legal entities (e.g. private laboratories and enterprises, government research centres and laboratories, universities and higher technological institutes), in relation to a particular, clearly specified part of the S&T research project.

Eligible subcontracting expenses, for the purposes of the research project concerned, (involving natural persons or legal entities) may not exceed in total 70% of the research project’s budget.

The additional documentation required for the certification of Consultants’/Subcontractors’ fees, consists in the following:

• Copies of the related works contracts, setting out clearly the physical scope of work to be implemented, the fees payable to the Consultants/Subcontractors, the contract term and the respective deliverables. Where a contract includes multiple activities (participation in research projects, general provision of services etc.), there must be a clear indication of the physical scope, fees and deliverables of each activity.
• Evidence of certification of the contracts by the competent Tax Office.
• Payment documentation (invoices or other accounting documents of equal probative value), in the form prescribed in the applicable Greek laws. Each document must clearly indicate the particular task concerned and must provide a clear allocation of fees, in the case of multiple tasks/projects.
• Evidence of payment and Item 53 accounting entries in respect of each member of the project team.
• Evidence of submission of Declarations of Fees from Liberal Professions (FLP), including the relevant release notes and Item 54 accounting entries.
• Project acceptance certificate, signed by the project manager, with thorough reference to the physical scope implemented and the respective deliverables.
• Analytical general ledgers of the separate accounts in the form of item 61.00.00.0080 “Fees and Expenses of S&T Professionals” kept in respect of the project’s expenses.

 

Expenditure Category 3-1: “Building Costs Amortisations”

This expenditure category includes the amortisation of costs of purchase / construction / repair / maintenance / renovation of building installations, insofar as they relate exclusively to scientific and technological research activities, following an allocation of expenses.

Eligible costs are only those depreciation costs that correspond to the project’s implementation period (insofar and for as long as they were incurred in relation to the project), which are calculated based on the generally accepted accounting principles.

The additional documentation required for the certification of building depreciation expenses consists in the following:

• Property ownership/acquisition titles
• Contracts signed with building/construction project contractors, duly certified by the competent Tax Office.
• Fixed Assets Record, for building depreciation expenses
• Analytical general ledger of the separate account kept for the project’s expenses (e.g. Item 11.00.00.0080 “S&T Building Expenses”)

 

Expenditure Category 3-2: “Instruments & Equipment Costs Amortisation (for research purposes)”

This expenditure category includes amortisations of costs of purchase of laboratory equipment and instruments, throughout the period they are used for research purposes (laboratory/semi-industrial devices, tools, scientific instruments, arrangements and components and semi-industrial testing installations). To wit, this is special-purpose equipment, rather than general or standard equipment, used in the company’s production process. This expenditure category may also include any additional transportation and installation costs as well as any staff training expenses.

The additional documentation required for the certification of instrument/equipment depreciation expenses consists in the following:

• Purchase invoices, in the form prescribed in the applicable national laws, with a clear description of the purchased equipment.
• Evidence of payment through use of a bank payment system, and Item 50 accounting entries in respect of each supplier.
• A fixed assets record, indicating the assets acquired and including essentially the following: A description of the asset, the reference number of the purchase invoice, the date of purchase, the purchase price, the depreciation years / rate, depreciation due to use, net book value etc.
• A list of the fixed assets’ serial numbers.
• In case of import/purchase of equipment from abroad, all documentation required under the law.
• Analytical general ledger for the separate account kept for the project’s expenses (e.g. Item 14.05.00.0080 “Cost of S&T Instruments & Equipment”).

If the company uses in the current year any assets which were procured in previous years, the relevant purchase invoices and payment receipts are also required.

 

Expenditure Category 3-3: “Depreciation of Costs of Purchase of Intangible Assets (software, software licenses)”

This expenditure category includes the depreciation of the cost of purchase of licenses of specialised scientific software “packages” required in the implementation of the research work. It also includes the depreciation of costs incurred for company’s connection to third-party data bases, national and international knowledge networks, electronic libraries or other electronic sources of specialised information and knowledge. The additional documentation required for the certification of depreciation of software expenses consists in the following:

• Software/license purchase invoices, in the form prescribed in the applicable national laws, with a clear description of the purchased item.
• Evidence of payment of the related invoices and Item 50 accounting entries in respect of each supplier.
• A fixed assets record, indicating the intangible assets acquired and including essentially the following: A description of the asset, the reference number of the purchase invoice, the date of purchase, the purchase price, the depreciation years / rate, depreciation due to use, net book value etc.
• A list of the fixed assets’ serial numbers.
• In case of import/purchase of equipment from abroad, all documentation required under the law.
• Analytical general ledger for the separate account kept for the project’s expenses (e.g. item 16.17.00.0080 “Cost of Purchase of S&T Software” etc.)

 

Expenditure Category 4:  “Transportation Expenses”

This includes inbound and outbound transportation expenses incurred in the context of company’s collaboration with laboratories etc., for the disclosure of findings pertaining to research work performed, planned or currently in progress or for staff’s attendance of seminars, conferences and scientific meetings that are directly related to the scientific and technological research activities performed.

The additional documentation required for the certification of transportation expenses consists in the following:

• List of Expenses/Transportation Costs, indicating thoroughly the transportation costs, passenger names, departure and arrival dates, destinations and the purpose of transport.
• Evidence of the expenses listed on the List of Expenses/Transportation Costs (e.g. tickets, hotel invoices etc.).
• Evidence of payment of transportation expenses (e.g. supplier’s payment receipts, supplier’s records, cash register reports, release notes issued to the supplier and/or passenger essentially through use of a bank system).
• A report documenting the necessity of the transport and its association with the project. Moreover, proper documentation must be supplied from the respective conferences (registration certificates, conference schedule, attendance certificates etc.).
• Analytical general ledger of the separate account, in the form of item 64.01.00.0080 “S&T Transportation Expenses”, kept in respect of the project’s transportation expenses.

It is noted that project team transportation costs incurred for any other purposes (e.g. For meetings with prospective customers, participation in fairs etc.) do not qualify as eligible costs.

 

Expenditure Category 5:  “Cost of Purchase of Consumables”

This includes costs relating to a broad range of consumable products which are directly linked to the project’s research scope (e.g. chemical and microbiological reagents, small part and expendable or limited-use instruments).

The additional documentation required for the certification of costs of this category consists in the following:

• Consumable purchase invoices, including payment receipts and Item 50 accounting entries in respect of the suppliers. (Due to their large volume, supplier accounting records shall be submitted only in electronic form).
• Analytical general ledger of the separate account, in the form of item 64.07.00.0080 “S&T Consumables Expenses”, kept in respect of the project’s consumables.

 

Expenditure Category 6.1:  “Other Expenses”

This expenditure category includes costs incurred for company’s connection to third-party data bases, national and international knowledge networks, electronic libraries or other electronic sources of specialised information and knowledge. As an essential prerequisite for the recognition of this type of expenses, these must be closely linked to the physical scope of the scientific and technological research performed. Eligible are also any expenses incurred for the issue of any patents in Greece or abroad.

The additional documentation required for the certification of transportation expenses consists in the following:

• Evidence of expenses, including a description of the related services (for costs incurred abroad, Invoices, rather than Proforma Invoices, are required).
• Evidence of payment through use of a bank payment system, and Item 50 accounting entries in respect of each supplier.
• Evidence of patent registration fees (in respect of any titles registered by the company) issued by the competent organisation (OBI, foreign patenting organisations).
• Analytical general ledger of the separate account kept in respect of the project’s other expenses (e.g. 64.05.00.0080 “S&T Subscription Fees” etc.).

 

Expenditure Category 6.2:  “Operating Expenses”

This includes current operating expenses e.g. rents, leasing expenses, utility charges (water/power supply charges, fixed/mobile telephony charges), postal charges etc. insofar as they relate exclusively to scientific and technological research activities, following an allocation of expenses.

The additional documentation required for the certification of transportation expenses consists in the following:

• Evidence of the various types of operating expenses, including payment receipts and accounting entries.
• Documentation report describing the allocation methodology of operating expenses relating to S&T activities.
• Analytical general ledger of the separate account, in the form of item 62.02.00.0080 “S&T Water Supply Expenses”, kept in respect of the project.

If the company enters a debt settlement arrangement, a document of the competent tax authority or social security organisation must be submitted evidencing the debt settlement arrangement, indicating essentially: The time period of the arrangement, the total amount of debt concerned, the number of payment instalments agreed and the amount of each instalment. The company must further submit evidence of payment of the instalments.