Taxation and Innovation
Peer Reviewed
Date issued
May 2022
Subject
Taxation;
Research and Development;
Small Business;
Productivity Level;
Intellectual Property;
Tax Administration;
Innovation;
Fiscal Incentive;
Income Tax;
Tax Rate
JEL code
H25 - Business Taxes and Subsidies;
H32 - Firm;
O32 - Management of Technological Innovation and R&D;
O38 - Government Policy
Category
Technical Notes
This paper reviews the empirical evidence on the effects of tax incentives on R&D, innovation, and productivity and on the effects of the tax burden on the relocation of R&D facilities. It discusses the various costs and benefits that have to be taken into account in the computation of the effectiveness of tax incentives on innovation. The paper ends with 10 policy lessons that can be drawn from the evidence reported in the literature.
