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A global perspective on Research & Development

A world of opportunity

A global perspective on Research & Development

Many countries offer generous incentives to encourage Research & Development (R&D), and investments in innovation. Studies demonstrate that companies that invest in R&D grow and prosper in increasingly competitive markets. Governments have acknowledged the significance of retaining scientific and technological knowledge and their commitment is evidenced by the wealth of benefits available across the globe for companies investing in R&D.

These R&D incentives apply to much more than the traditional scientific research performed in laboratories, and cover activities within a range of industries including engineering, manufacturing, energy and software.

R&D incentives vary from country to country in terms of the mechanics of making a claim, the level of benefit available and the approach adopted by the tax authorities in reviewing claims for relief. Within most jurisdictions offering R&D incentives, the benefit is delivered through a reduction in taxes payable or, in some countries where the credit provided cannot be used to offset tax payable due to losses, via a cash payment. Most importantly, the differences in the detail of the regimes and their interaction often present opportunities for companies to take full advantage of their global structure.

The defining criteria of the regimes are as follows:

  • Is the regime an incremental or volume based incentive?
  • Is there a cap to the available benefit?
  • What is the rate of relief on an after tax basis?
  • What activities qualify for the incentive?
  • Can the R&D be contracted to, or from, a third party?
  • Do the R&D activities have to be physically performed within the jurisdiction offering the incentive?
  • Does the IP need to reside in the country granting, or the company claiming the relief?
  • Which costs qualify for relief?
  • Is the credit refundable?
  • Can surplus relief be carried back to earlier, or forward to future years?

For more information, download our brochure discussing the A global perspective on Research & Development (PDF, 406 KB).

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