Measuring Tax Support for R&D and Innovation

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In addition to direct support measures such as grants, governments worldwide increasingly rely on tax incentives to promote business R&D and encourage innovation and economic growth. Since 2007, the OECD has been developing measurement and analysis methodologies to provide qualitative and statistical evidence on the use, cost and impacts of R&D tax incentives.

Latest data, December 2020: Update of the OECD R&D tax incentive database with the latest edition of time-series estimates of government tax relief for R&D tax expenditure (GTARD) and implied marginal R&D tax subsidy rates across OECD and partner economies. These data highlight trends in the magnitude of tax incentive and direct support for business R&D from 2000 to 2018 and the notional levels of R&D tax subsidy by firm size (SME, large firm) and profit scenario (profitable, loss-making) from 2000 to 2020.

Direct government funding and tax support for business R&D, 2018
As a percentage of GDP

Source: OECD R&D Tax Incentive Database, December 2020 | Data and notes

Latest publication, December 2020: The OECD report on the R&D Tax Incentives Database (2020 edition) presents the latest evidence on the design, generosity and cost of R&D tax incentives in OECD countries and partner economies. This report highlights the latest policy changes introduced in 2020, including crisis response measures following the COVID-19 pandemic outbreak.

COUNTRY PROFILES

(Next update due February 2021)

General and country-specific notes on the B-index time-series estimates contained in the 2019 edition of OECD R&D tax incentive country profiles (released March 2019).

information on the Design and scope of R&D tax incentives

microBeRD: an OECD study on the impact of R&D tax incentives

The OECD is working on a micro-data project which applies a “distributed” approach to the empirical analysis of micro-data. The OECD microBeRD project project investigates and models the incidence and impact of public support for business R&D in collaboration with national experts with access to confidential R&D and public support micro-data. This approach facilitates a co-ordinated statistical analysis of the impact of tax relief design features and their interaction with direct forms of public R&D funding by exploiting variation in support within and across countries.

OECD publications, working papers and policy papers on R&D tax incentives