Measuring R&D Tax Incentives


Indicators   Country profiles  Scope and design   Definitions

R&D tax incentives have become an important policy instrument in several OECD countries and partner economies to encourage firms to invest in R&D. This page provides an update of the latest indicators and complementary information on R&D tax incentives as featured in the OECD Science, Technology and Industry Scoreboard.

R&D Tax incentive indicators

R&D tax incentive indicators illustrate the extent to which governments support R&D through tax relief, over time and relative to other mechanisms. They also show the gap between the theoretical level of support provided per unit of R&D expenditure and actual costs incurred by different governments.
View the latest R&D tax incentive indicators

Country Profiles

‌ Canada ‌‌Japan
United Kingdom
‌‌ France
 Korea (forthcoming) ‌ United States

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Scope and design of R&D tax incentives

Governments can choose among various instruments to promote business R&D. In addition to giving grants or loans and procuring R&D services, many also provide fiscal incentives. Tax incentives for business R&D expenditures include allowances and credits, as well as other forms of advantageous tax treatment such as allowing for the accelerated depreciation of R&D capital expenditures. As of 2015, 28 of the 34 OECD countries and a number of non-OECD economies give preferential tax treatment to R&D expenditures and do so in many different ways.

For information on the scope and design of R&D tax incentives in OECD countries and partner economies, click the links below:

Overview of schemes used by countries to provide tax support for R&D
Compendium of information on the design and scope of R&D tax incentive schemes in OECD member states and partner economies
Eligibility of current and capital expenditure for R&D tax relief in selected OECD and non OECD countries

OECD Data and Statistics on R&D Tax Incentives

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Definition and Measurement

New estimates of the cost of R&D tax incentives have been combined with data on direct R&D funding (R&D grants and purchases), as reported by firms, to provide a more complete picture of government efforts to promote business R&D.

More information on the definitions and measurement

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Related links

R&D Tax Incentives: Evidence on design, incidence and impacts, OECD Science, Technology and Industry Policy Papers, No. 32, OECD Publishing, Paris.

Maximising the benefits of R&D tax incentives for innovation, OECD policy brief, October 2013

The new R&D tax credit and patent box proposed in the Legge di Stabilità 2015, OECD policy brief, April 2015

OECD/G20 Base Erosion and Profit Shifting project

 OECD (2014), “Tax incentives for R&D and innovation”, in OECD Science, Technology and Industry Outlook 2014

OECD (2015), Frascati Manual 2015: Guidelines for Collecting and Reporting Data on Research and Experimental Development, The Measurement of Scientific, Technological and Innovation Activities, 7th edition, OECD Publishing, Paris,

OECD work on knowledge-based capital 

OECD Main Science and Technology Indicators Database

OECD (2010), Tax Expenditures in OECD Countries

Warda, J. (2001), “Measuring the Value of R&D Tax Treatment in OECD Countries”, STI Review No. 27: Special Issue on New Science and Technology Indicators, OECD Publishing.

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