The Impact of R&D Tax Incentives on R&D Costs and Income Tax Burden

Arbeitspapier

We analyse R&D tax incentives in a detailed way considering a multi-period setting and economic assumptions which reflect a realistic economic environment. We measure the incentive's impact on the firm's total tax payments and the R&D cost by means of the simulation model European Tax Analyzer. Using different economic settings and model firms, we run sensitivity analyses and get by that a more detailed view on the effects from R&D tax incentives against the background of the framing tax system. We find that not so much the kind but rather the specific design of R&D tax incentives, the interplay with the framing tax system and the firm's profitability relative to the level of R&D expenditures heavily influence the amount of tax subsidy for R&D.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ZEW Discussion Papers ; No. 08-124

Classification and Topics

• Classification: Wirtschaft ; Technological Change: Government Policy ; Business Taxes and Subsidies including sales and value-added (VAT) ; Innovation and Invention: Processes and Incentives
• Subject: R&D ; Tax incentives ; Corporate Tax Burden ; Forschungssubvention ; Industrielle Forschung ; Steuerbegünstigung ; Forschungskosten ; Körperschaftsteuer ; Steuerbelastung ; Steuerwirkung ; Vergleich ; EU-Staaten

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Elschner, Christina ; Ernst, Christof
• Event: Veröffentlichung
• (who): Zentrum für Europäische Wirtschaftsforschung (ZEW)
• (where): Mannheim
• (when): 2008

Further information

• Handle: http://hdl.handle.net/10419/27607
• Last update: 10.03.2025, 11:41 AM CET