Measuring Tax Support for R&D and Innovation

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Highlights | Indicators | Measurement

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 news, April 2021: Release of the 2020 edition of the OECD R&D tax incentive country profiles. These extended profiles provide the most up-to-date internationally comparable information – qualitative and quantitative – on the design and cost of R&D tax relief provisions used by countries to incentivise business R&D. Drawing on the latest indicators of government tax relief for R&D from the OECD R&D Tax Incentives database, updated in March 2021, they highlight recent and long-term trends in the role of R&D tax incentives in the innovation policy mix across OECD countries and partner economies.

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

Direct government funding and tax support for business R&D

Source: OECD R&D Tax Incentives Database, March 2021 | 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 - 2020 edition (released March 2021)

Click here for general and country-specific notes on the B-index time-series estimates contained in the 2020 edition of OECD R&D tax incentive country profiles.

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.

The final report with the results from the first phase of the microBeRD project (2016-19) was launched at a joint event with the European Commission in October 2020, organised as part of the 2020 EC-OECD Innovation and growth webinar series. For more details and to watch this event, see here.

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