2.8 Eligibility of expenditure

The following Interreg NPA Eligibility Rules, laying down the details concerning eligibility of expenditure in the NPA programme, shall be applied for all projects co-financed by the Programme. The rules take into account the specific rules for eligibility of expenditure set up by the European Commission, with some further programme specific requirements agreed between the programme partner countries.

The same rules apply regardless of which country the project partner operates in. Only in cases where expenditure is not covered by the European Commission rules and/or the Interreg NPA Eligibility Rules, national rules of the country where the expenditure is incurred shall apply.

The following cost categories are allowed in the Interreg NPA:

1. Staff costs

2. Office and administrative costs

3. Travel and accommodation costs

4. External expertise and services costs

5. Equipment costs

 All expenditure in the allowed categories has to be project-related. This means that it should be clearly connected to project activities traceable in the approved application form. Furthermore, the expenditure has to be incurred, entered into the project accounts and paid by, or on behalf of, the project partner during the project period determined by the Managing Authority in the Grant Letter. It should be noted that value added tax (VAT) is normally eligible, even if it is recoverable for the project partner.

National procurement rules have to be observed for all partners (regardless of legal status) and all purchases. Full documentation of the procurement is obligatory for expenditure to be regarded as eligible. Even below national and EU thresholds, contracts with external providers shall comply with the principles of transparency, non-discrimination, equal treatment, and effective competition. 

2.8.1 Staff costs

Staff costs cover costs of staff members employed by the partner organisation, who are directly working on the project.

1. Staff costs shall consist of gross employment costs of staff employed by the Interreg partner in one of the following ways:

   1. full time;

   2. part-time with a fixed percentage of time worked per month;
      

2. Staff costs shall be limited to the following:

   1. salary payments related to the activities which the entity would not carry out if the operation concerned was not undertaken, provided for in an employment document, either in the form of an employment or work contract or an appointment decision, or by law, and relating to responsibilities specified in the job description of the staff member concerned.
      Payments to natural persons working for the Interreg partner under a contract other than an employment or work contract may be assimilated to salary payments and such a contract shall be considered to be an employment document.

   2. any other costs directly linked to salary payments incurred and paid by the employer, such as employment taxes and social security including pensions as covered by Regulation (EC) No 883/2004 of the European Parliament and of the Council, on condition that they are:

      1. provided for in an employment document or by law;

      2. in accordance with the legislation referred to in the employment document and with standard practices in the country or the organisation where the individual staff member is actually working, or both; and

      3. not recoverable by the employer.
         

3. Staff costs may be reimbursed either:

   1. as reimbursement of eligible costs actually incurred by a beneficiary, proven by the employment document and payslips;

   2. as lump sums under simplified cost options as set out in point (c) of Article 53(1) of Regulation (EU) 2021/1060. In such cases, staff costs will be included in a lump sum. The lump sum is paid if the conditions as defined in the Grant Letter are met. No supporting documents are required for verification of the staff costs.
      

4. Staff costs related to individuals who work on part-time assignment on the operation, may be calculated as: a fixed percentage of the gross employment cost in line with a fixed percentage of time worked on the operation per month, with no obligation to establish a separate working time registration system. The employer shall issue a document for employees setting out that fixed percentage and a description of tasks of the employee in the project.

Calculation method for staff costs

Audit trail for staff costs

2.8.2. Office and administrative costs

This cost category covers general office and administration expenditures related to the project.

1. Office and administrative costs shall be limited to the following elements:

   1. office rent;

   2. insurance and taxes related to the buildings where the staff is located and to the equipment of the office (such as fire or theft insurance);

   3. utilities (such as electricity, heating, water);

   4. office supplies;

   5. accounting;

   6. archives;

   7. maintenance, cleaning and repairs;

   8. security;

   9. IT systems;

   10. communication (such as telephone, fax, internet, postal services, business cards);

   11. bank charges for opening and administering the account or accounts where the implementation of an operation requires a separate account to be opened; and

   12. charges for transnational financial transactions.

2. Office and administrative costs shall be financed as a flat rate only, and they shall be calculated as a fixed percentage of 15% of the eligible direct staff costs.  

Audit trail for office and administration costs

The flat rate does not require documenting that the expenditure has been incurred and paid, or that the flat rate corresponds to real costs.

2.8.3. Travel and accommodation costs

1. Travel and accommodation costs, regardless whether such costs are incurred and paid inside or outside* the programme area, shall be limited to the following cost elements:

   1. travel costs (such as tickets, travel and car insurance, fuel, car mileage, toll, and parking fees);

   2. the cost of meals;

   3. accommodation costs;

   4. visa costs and

   5. daily allowances.

2. Any cost element listed in points (a) to (d) of paragraph 1 covered by a daily allowance shall not be reimbursed in addition to the daily allowance.

3. Travel and accommodation costs of external experts and service providers fall under external expertise and services costs.

4. Direct payment of expenditure for cost elements listed in points (a) to (d) of paragraph 1 by an employee of the beneficiary shall be supported by a proof of reimbursement by the beneficiary to that employee.

5. Travel and accommodation costs of an operation may be calculated at a flat rate of 15 % of the direct staff costs of that operation. If the option of a flat rate is chosen, this must be applied on partner level for the entire duration of the project.

*For travel and activities outside the programme area, please check the FAQ section.

Audit trail for travel and accommodation costs

The flat rate option does not require any documenting that the expenditure has been incurred and paid, or that the flat rate corresponds to real costs.

 In case the real cost reimbursement option is used, the following main documents must be available for control purposes:

• Agenda or similar of the event;

• Paid invoices (e.g. hotel invoice, travel ticket);

• Daily allowance claim;

• Proof of payment.

2.8.4 External expertise and services costs

1. External expertise and service costs cover expenditures paid by the partner organisation for the support in the project implementation provided by a public or private body, or a natural person outside the partner organisation and all partners of the project. External expertise and services costs shall be limited to the following services and expertise:

   1. studies or surveys (such as evaluations, strategies, concept notes, design plans, handbooks);

   2. training;

   3. translations;

   4. development, modifications and updates to IT systems and website;

   5. promotion, communication, publicity, promotional items and activities or information linked to an operation or to a programme as such;

   6. financial management;

   7. services related to the organisation and implementation of events or meetings (including rent, catering or interpretation);

   8. participation in events (such as registration fees);

   9. legal consultancy and notarial services, technical and financial expertise, other consultancy and accountancy services;

   10. intellectual property rights;

   11. management verifications carried out by identified controllers;

   12. the provision of guarantees by a bank or other financial institution where required by Union or national law or in a programming document adopted by the monitoring committee;

   13. travel and accommodation for external experts, speakers, chairpersons of meetings and service providers; and

   14. other specific expertise and services needed for operations.
       

2. Sub-contracting between partners, including associated partners, is not allowed.

 Audit trail for external expertise and services costs

The following main documents must be available for control purposes:

• Evidence of the procurement process (announcement, selection, award) in line with the legal status/organisational/regional/national procurement rules or the EU procurement rules depending on the amount of the contract and programme specific rules;

• A document laying down the services to be provided with a clear reference to the project and the programme.  For instance, for experts paid on the basis of a daily fee, the daily rate together with the number of days contracted and the total amount of the contract must be included in the contract. Any changes to the contract must comply with the public procurement rules and must be documented;

• An invoice or a request for reimbursement providing all relevant information in line with the applicable accounting rules;

• Outputs of the work of external experts or service deliverables;

• Proof of payment.

2.8.5. Equipment costs

1. Costs for equipment purchased, rented or leased by the beneficiary of the operation other than those covered by office and administrative costs shall be limited to the following:

   1. office equipment;

   2. IT hardware and software;

   3. furniture and fittings;

   4. laboratory equipment;

   5. machines and instruments,

   6. tools or devices;

   7. vehicles; and

   8. other specific equipment needed for operations.
      

2. Costs for the purchase of second-hand equipment may be eligible subject to the following conditions:

   1. no other assistance has been received for it from the Interreg funds or from any other programme within the European Regional Development Fund (ERDF), the European Social Fund Plus (ESF+), the Cohesion Fund, the Just Transition Fund (JTF), the European Maritime, Fisheries and Aquaculture Fund (EMFAF), the Asylum, Migration and Integration Fund (AMIF), the Internal Security Fund (ISF) and the Instrument for Financial Support for Border Management and Visa Policy (BMVI);

   2. its price does not exceed the generally accepted price on the market in question; and

   3. it has the technical characteristics necessary for the operation and complies with applicable norms and standards.

Audit trail for equipment costs

The following main documents must be available for control purposes:

• Evidence of the procurement process (announcement, selection, award, contract) in line with the legal status/organisational/regional/national procurement rules or the EU procurement rules depending on the amount of the contract and programme specific rules; the technical characteristics have to be in line with the project purposes;

• Any changes to the contract must comply with the public procurement rules and must be documented;

• An invoice or a request for reimbursement providing all relevant information in line with the applicable accounting rules;

• Actual equipment purchased and evidence of equipment purchased, rented or leased;

• Calculation scheme of depreciation, if applicable;

• Proof of payment.

2.8.6 Indicative list of ineligible expenditure

The following costs are not eligible in the INTERREG NPA:

1. fines, financial penalties and expenditure on legal disputes and litigation;

2. costs of gifts; or

3. costs related to fluctuation of foreign exchange rate.

4. Recoverable VAT for partners funded under GBER Article 20 and 20a.

2.8.7 References

European Commission rules on eligibility of expenditure can be found in:

• Regulation (EU) No 1059/2021, Articles 37-44

• Regulation (EU) No 1060/2021, Articles 63-68

Please note that there are also a number of other EU Regulations applicable to the project activities. For example, regulations regarding public procurement and State Aid. It should be kept in mind that there might also be EU Regulations applicable for the specific area in which the project operates.