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Project Financing

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Research Projects

Financing of Scientific Programs and Projects

The provisions of the Act on Higher Education and Scientific Activity (Official Gazette 119/22) determine the basic rules for conducting and financing scientific research.

Pursuant to Article 109 of the Act, higher education institutions, institutes and other research organizations are financed from the following sources:

  1. Public universities, polytechnics and colleges shall be financed from the national budget taking into account the determined capacities of each higher education institution, the cost of individual studies and the assessment of their quality based on the evaluation referred to in Article 16 of this Act.
  2. Private higher education institutions may also be financed from the national budget, on the basis of a previously concluded contract, provided that:
     a) they perform an activity in which social needs go beyond the available possibilities of public higher education institutions or their activity is of particular national interest,
     b) meet the requirements prescribed in the Act,
     c) meet the criteria and priorities established by the National Council for Science, Higher Education and Technological Development, taking into account the available resources and quality of these institutions.
  3. Funds from the national budget allocated to universities, polytechnics and colleges are transferred to beneficiaries in the total amount, and their budget allocates them for specific purposes, in accordance with their statutes and other general acts. The university budget shall be adopted by the Senate on the proposal of the Rector, and the budget of the Polytechnic and the College shall be adopted by the Expert Council on the proposal of the Dean.
  4. The university constituents shall allocate part of their own income referred to in Article 107 paragraph 1 of this Act to the university budget for capital investments and development programmes, in accordance with the general acts of the university.
  5. Public higher education institutions have funds in accordance with this Act and regulations regulating the implementation of the national budget.
  6. With the agreement of the contracting parties, part of the activities of public universities may also be financed in accordance with special agreements concluded between the Ministry and public universities.

The methods of financing scientific projects, associate positions, and scientific equipment is prescribed by Articles 111 to 111d of the Act, as follows:

Article 111

  1. In addition to the previous opinion of the National Council for Science, Higher Education and Technological Development, the Ministry is launching tenders for financing scientific projects, associate positions for scientific recruits, and scientific infrastructure and equipment from national budget funds. Calls are open for applications until their revocation (open call) and financing decisions will be made periodically, at least once a year and at least four times a year for scientific recruits, in accordance with available funds.
  2. Research organisations, scientific centres of excellence, scientists and groups of scientists may apply for the call for scientific projects. Research organisations may apply for the call for co-employment and for the call for procurement of scientific infrastructure and equipment.
  3. The decision on financing projects, associate positions and procurement of scientific equipment is made by the Minister. The evaluation is based on the anonymous evaluation of independent experts from the country and abroad whose list is determined by the National Council for Science, Higher Education and Technological Development in individual scientific fields.
  4. On the allocation of funds from the National budget for the procurement of capital and medium-sized scientific equipment, the research organization concludes a contract with the Ministry setting out the method of use of equipment by other research organizations and scientists whose work is financed or co-financed from the National budget. The Ministry shall keep a register of scientific equipment purchased in part or in full from the resources of the budget.

Article 111a

  1. The total amount of national aid that the beneficiary of national aid can achieve, on all grounds, granted pursuant to this Act and other regulations, for basic research may be up to 100% of the amount of eligible project costs, for applied research up to 50% of the amount of eligible project costs, and for development research up to 25% of the amount of eligible project costs.
  2. The amount of national aid for applied and development research referred to in paragraph 1 of this Article may be increased by 20% of the amount of eligible project costs for small enterprises and by 10% of eligible project costs for medium enterprises.
  3. The amount of National aid for technical feasibility studies for carrying out applied research may be granted up to 75% of the eligible costs of the study for small and medium enterprises and up to 65% of the eligible costs of the study for large enterprises.
  4. The amount of National aid for technical feasibility studies for the implementation of development research may be granted up to 50% of the eligible costs of the study for small and medium enterprises and up to 40% of the eligible costs of the study for large enterprises.

Article 111b

  1. Scientific research, within the meaning of this Act, is considered the original and planned research undertaken for the acquisition of new scientific and technical knowledge and understanding, and includes basic and applied research.
  2. Basic research, within the meaning of this Act, implies activities intended for the dissemination of scientific and technical knowledge which are not related to industrial and commercial objectives.
  3. Applied research, within the meaning of this Act, implies planned research or critical testing with the aim of acquiring new knowledge that can be used for the development of new products, production processes or services, or for significant improvements of existing products, production processes or services.
  4. Development research, within the meaning of this Act, is considered development research activities intended to convert the results of applied research into plans, drawings or models for new, modified or improved products, production processes or services, whether intended for sale or use, including the production of first prototypes that are not commercially usable. Development research may also include conceptual planning and modelling of alternative products, production processes or services and first demonstration or pilot projects, provided that those projects cannot be processed or used for industrial applications or commercially exploited. Development research shall not cover routine or regular changes to products, production lines, production processes, existing services and other current operations, even if the said changes represent improvements.

Article 111d

  1. Eligible costs of research within the meaning of this Act shall be considered as:
     1. salaries of employees and compensation to persons directly participating in research,
     2. material costs for research, which are: raw materials and consumables consumed, including packaging and small inventory, energy consumed, spare parts used or consumed during the research; consumed material and parts for the on-going and investment maintenance of facilities and equipment used directly for research,
     3. costs of services used during research, such as intellectual services related to research and any other services required for the realisation of research,
     4. costs of depreciation of property, plant and equipment in so far as these funds are used for research by those taxpayers carrying out the research themselves, and depreciation expenditure shall be determined in the manner laid down in Article 12 of of the Income Tax Act,
     5. costs of depreciation of purchased patents and licenses used for specific research, and depreciation expenditures are determined in the manner prescribed by Article 12 of the Corporation tax Act,
     6. general expenses, which only understand those costs which are necessary for research and which can be allocated on a reasonable and consistent basis to that activity, such as premiums for insurance of processes, responsibilities and equipment for research and rents and subscriptions of professional research associations.
  2. The assessment of the plausibility of eligible costs shall be carried out, where appropriate, by the ministry responsible for scientific affairs.