Corporate effective tax rates for R&D: The case of expenditure-based R&D tax incentives

R&D tax incentives have become a widely used policy tool to promote business R&D. How do they shape firms' incentives to invest in R&D? This paper contributes a methodology to construct forward-looking effective tax rates for an R&D investment that reflect the value of expenditu...

Full description

Saved in:
Bibliographic Details
Main Author: González Cabral, Ana Cinta (Author)
Other Authors: Appelt, Silvia (Contributor), Hanappi, Tibor (Contributor)
Format: Electronic eBook
Language:English
Published: Paris OECD Publishing 2021
Series:OECD Taxation Working Papers no.54
Subjects:
Online Access:DE-862
DE-863
Summary:R&D tax incentives have become a widely used policy tool to promote business R&D. How do they shape firms' incentives to invest in R&D? This paper contributes a methodology to construct forward-looking effective tax rates for an R&D investment that reflect the value of expenditure-based R&D tax incentives. The new OECD estimates cover 48 countries and consider the case of large profitable firms, accounting for the bulk of R&D in most economies. The results provide new insights into the generosity of R&D tax incentives from the perspective of firms that decide on whether or where to invest in R&D (extensive margin) and the level (intensive margin) of R&D investment. The generosity of the favourable tax treatment of R&D is shown to vary at the intensive and extensive margins, highlighting differences in countries' strategies to support R&D through the tax system.
Physical Description:1 Online-Ressource (66 Seiten)

There is no print copy available.

Get full text