ZPU and R&D tax relief together: how they combine.
END2END used tax relief under the Investment Promotion Act (ZPU) for its investment, and tax relief for research and development for its development work. The two act on different parts of the tax calculation, so they can be combined.
Published in November 2026, with the client’s consent.
approved tax aid for research and development, END2END
lower corporate tax rate under ZPU
of development costs as an additional tax base reduction
Two reliefs, two mechanisms.
- R&D tax relief reduces the tax base: an eligible development cost reduces it by 250 to 400% of its amount.
- ZPU lowers the corporate tax rate by 50, 75 or 100%, for up to 10 years, on profit from the investment project.
- The order matters: first the base is reduced by the R&D relief, then the lower ZPU rate applies to what remains.
Worked example.
The figures are invented and are not client data. Profit before tax is €1 million and the corporate tax rate is 18%. The development project has €100k of eligible industrial research costs, which reduce the base by 300%, or €300k. ZPU lowers the rate by 50%. We assume that all profit comes from activities covered by the ZPU project and that aid limits are not reached.
| Tax base | Rate | Tax | Saving | |
|---|---|---|---|---|
| No relief | €1 million | 18% | €180k | - |
| R&D relief only | €700k | 18% | €126k | €54k |
| ZPU only | €1 million | 9% | €90k | €90k |
| R&D relief and ZPU | €700k | 9% | €63k | €117k |
Together that is €117k less tax. This is less than the sum of the separate savings, €144k, because the base reduction is multiplied by the lower rate. With a rate reduction of 75 or 100%, the R&D relief is worth even less in those years, so we plan the application years in advance.
What we did for END2END.
- The ZPU project has been completed: aid was granted in 2023 and 2024, the annual reports were submitted, and the employment obligation was met with a new job.
- The R&D project develops a platform-independent framework for AI services in customer support. The approved tax aid is €266k.
- We went through the full cycle: application, confirmation, annual report and approval.
- We handled the applications, the reports and communication with the ministry and the Tax Administration.
What to check before combining.
- Both reliefs require registration before the start: ZPU before the investment starts, the R&D relief before work on the project starts.
- We separate the costs: development goes into the R&D relief, assets or new jobs into ZPU.
- If the deduction exceeds the profit, the difference becomes a tax loss carried forward for up to five years.
- Both reliefs require an annual report, and ZPU also requires keeping the new jobs.
Sources: Investment Promotion Act (OG 63/22, 136/24); Act on State Aid for Research and Development Projects (OG 64/18, 152/24); Corporate Income Tax Act, Articles 6 and 17. Investment tax relief: ZPU - R&D tax relief
The calculation is an illustration, not tax advice for a specific company. Results of previous projects do not guarantee a new application. All news →
Investment and development in the same period.
If you plan both, in 15 minutes we’ll check which reliefs apply and in what order to apply for them.
€9M+ in funding approved on Vemar projects