Study and Exchange of Good Practices on R&D Tax Incentives
Many Member States of the European Union appear to shift public support for innovation from direct grants towards tax incentives. A good understanding of the effectiveness of R&D tax incentive schemes in practice is essential to making informed choices on the mix of policy instruments used for stimulating innovation and on the optimal size of the budget allocated to innovation policy.
General objective of the project:
The objective of the study is to:
- Provide an overview of R&D tax incentives schemes for EU Member States and members of the OECD, including those that were recently modified or phased out, and provide an up-to-date review of the empirical literature on the impact of R&D tax incentives. The literature survey will cover the impact of R&D tax incentives on private R&D investments, innovation output of companies, productivity and broader welfare level, and economic efficiency and deadweight losses.
- Benchmark the existing R&D tax incentive schemes with respect to effective design features, administration practices, data availability, and interaction of R&D tax incentives with other innovation policy measures.
Project structure and involvement of CASE:
The study is divided into four basic tasks:
Task 1: Survey of empirical literature on R&D tax incentives
Task 2: Overview of R&D tax incentives schemes
Task 3: Working group meetings on good practices
Task 4: Benchmark R&D tax incentives
CASE is responsible for the following country-studies: Belgium, Bulgaria, Cyprus, Czech Republic, Estonia, France, Greece, Hungary, Israel, Japan, Korea, Latvia, Lithuania, Luxembourg, Malta, Poland, Romania, Slovak Republic, Slovenia and Turkey. Country studies are provided within tasks 1,2 and 4. The rest of the countries are divided between ETLA, IHS and CPB.
CASE experts will visit two working group meetings.
EC DG TAXUD
Netherlands Bureau for Economic Policy Analysis (CPB)
Research Institute for the Finnish Economy (ETLA)
Institute for Advanced Studies (IHS)