Research and Development Dying Out in Croatia

Total Croatia News

R&D needs investments… and state incentives.

You are bad at something, and then you decide to become even worse at it. This would be a short description of Croatia’s attitude towards research and development (R&D). Meanwhile, the most developed countries in the world are competing which one will invest more into this important segment, reports on April 24, 2016.

Croatia is one of the EU countries with lowest investments in the research and development area. But, this was obviously not enough of a warning – the relevant rules have not been adopted for 2015, and they will not be adopted, apparently, for at least the first part of this year, so there will be no related tax breaks, which will additionally negatively affect the level of investments in the R&D.

More precisely, in the vacuum that has been created between the Ministry of Science, Education and Sports (MZOS) and the Finance Ministry, the Programme of State Support for Research and Development Projects 2015-2020 has been lost, and this means that there will be no tax breaks for 2015 and at least the first half of this year. This might not seem so terrible, but it actually is.

All these mechanisms that stimulate investments into R&D are an important factor when it comes to decisions regarding investments, whether the decisions are being made by the companies already present here, or those who are thinking about entering the Croatian market. This is an especially hard blow to small and medium businesses that are already having difficulties with financing their research and development activities.

“At this very moment, no legal basis exists for the state incentives for the research and development projects in the form of tax breaks, as the Programme has not received the green light from the Finance Ministry at the end of 2015. As a result, the Ministry of Science, Education and Sports has initiated the procedure for the adoption of the Law on State Support for Research and Development Projects”, MZOS said. It is expected that the law will be submitted for adoption to Parliament in July of this year.


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