More and more OECD governments are giving firms tax breaks to drive innovation while cutting their direct spending on business research and development (R&D), and are also encouraging public research organisations to commercialise their inventions, according to a new OECD report.
According to the OECD Science, Technology and Industry Scoreboard 2007, two thirds of the 30 OECD member countries offered businesses tax subsidies in 2006, up from 12 in 1995, and most have tended to make it more generous over the years.
Direct government funding financed an average of 7% of business R&D in 2005, down from 11% in 1995.
Spain, China, Mexico and Portugal provide the largest tax subsidies and make no distinction between large and small firms. Canada and the Netherlands on the whole continue to be more generous to small firms than large ones. Emerging economies, including Brazil, India, Singapore and South Africa, also offer a generous and competitive tax environment for businesses investing in R&D.
The type of tax subsidy available varies from country to country but includes an immediate write-off of current R&D spending, as well as tax relief or allowances against taxable income.
See full Press Release.
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