BlogTax Basics Public grants and the R&D Law: how to combine them without losing the benefit
Many companies doing R&D already receive public support: a grant from Corfo, ANID or another fund. A common question is whether they can also use the R&D Law. The answer is yes, but there are clear rules to avoid getting the benefit twice on the same spending.
The general rule: they’re complementary
According to Corfo’s FAQ, the tax incentive is complementary to existing public funding. You can certify a project in which part of the activities are funded by a grant.
But you have three obligations:
- Declare it in the certification application.
- Claim credit only on what the company actually paid, not the part funded with public money.
- File a sworn statement with the SII stating that the project has a public funding component.
An example
Take a certified project of CLP $200,000,000, of which a grant covers $80,000,000.
| Item | Amount |
|---|---|
| Total project cost | $200,000,000 |
| Funded by the grant | $80,000,000 |
| Paid by the company | $120,000,000 |
| Tax credit (35% of what was paid) | $42,000,000 |
The credit is calculated on the $120 million the company paid, not on the $200 million project.
A grant doesn’t replace certification
Another common mistake: assuming that because a public fund already evaluated and awarded the project, it doesn’t need certifying. Corfo is clear that you must file a separate certification application, with all the documents the R&D Law requires.
The criteria are different too: a fund may support innovation in general, while the R&D Law requires the activities to be R&D under its definition. See Innovation is not the same as R&D.
Incompatible tax benefits
SII Circular No. 19 states that payments claimed under the R&D Law can’t also be used for other tax benefits on the same spending, in particular:
- The expense deduction in Article 31 No. 11 of the Income Tax Law (scientific and technological research expenses).
- The Article 33 bis credit of the Income Tax Law.
If your company already uses one of these benefits, check with your adviser which one suits each expense best.
In short
- You can combine the R&D Law with public grants.
- The credit applies only to what the company pays with its own money.
- Declare the grant to Corfo and file the sworn statement with the SII.
- A grant doesn’t replace certification, and some tax benefits are incompatible.
This article is for information only and is not tax advice. Sources: Law 20,241, Corfo’s FAQ and SII Circular No. 19.