Database Specific
Database Specific Abstract AbstractThe OECD R&D Tax Incentives database presents the 2022 edition of OECD time-series indicators of implied R&D tax subsidy rates for OECD member countries and eleven non-member economies (Argentina, Brazil, Bulgaria, People's Republic of China, Croatia, Cyprus, Malta, Romania, Russian Federation, South Africa, and Thailand) over the period 2000-2022, drawing on data collected in the OECD-NESTI R&D tax incentive surveys from 2007 to 2022. The 2022 edition of RDTAXSUB contains time-series estimates that are based on headline tax credit and allowance rates, by firm size and profitability scenario. Due to limited historical data availability, the estimates are not adjusted for provisions that bound the tax benefits received by firms (e.g. ceilings, thresholds). They therefore provide an upper bound for the marginal tax subsidy implied by R&D tax relief measures at central government level across countries over time. These estimates should not be confused with separate contemporary cross-sectional OECD estimates of marginal tax subsidy rates (OECD, 2023) that compute adjusted (weighted) tax credit/allowance rates for a number of countries based on available information on the proportion of eligible R&D subject to different marginal levels of relief.
The tax subsidy rate is defined as 1 minus the B-index, a measure of the before-tax income needed by a “representative” firm to break even on USD 1 of R&D outlays (Warda, 2001). As tax component of the user cost of R&D, the B-Index is is directly linked to measures of effective marginal tax rates. Measures of tax subsidy rates such as those based on the B-index provide a convenient proxy for examining the implications of tax relief provisions. These provide a synthetic representation of the generosity of a tax system from the perspective of a generic or model type of firm for the marginal unit of R&D expenditure. To provide a more accurate representation of different scenarios, B-indices are calculated for “representative” firms according to whether they can claim tax benefits against their tax liability in the reporting period (OECD, 2013). When credits or allowances are fully refundable, the B-index of a firm in such a position is identical to the profit scenario. Carry-forwards are modelled as discounted options to claim incentives in the future, assuming a constant annual probability of returning to profit of 50% and a nominal discount rate of 10%.
For general and country-specific notes on the time-series estimates of implied marginal tax subsidy rates on R&D expenditures (based on the B-index), see http://www.oecd.org/sti/rd-tax-stats-bindex-notes.pdf.
Source Source Contact person/organisation Contact person/organisationComments or questions regarding RDTAXSUB can be sent to RDTaxStatsContact@oecd.org.
Name of collection/source Name of collection/sourceOECD R&D tax subsidy (RDTAXSUB) dataset 2022/2
Direct source Direct sourceOECD R&D Tax Incentives database; https://oe.cd/rdtax
Data Characteristics Data Characteristics Date last updated Date last updatedRelease date: 7 April 2023
Other data characteristics Other data characteristicsThe latest indicators and information on R&D tax incentives also feature on the dedicated OECD website Measuring R&D tax incentives, including the latest edition of OECD R&D tax incentive country profiles.
Reference period Reference periodYEARS COVERED: 2000 onward.
Population & Scope Population & Scope Geographic coverage Geographic coverageCOUNTRIES COVERED: Australia, Austria, Belgium, Canada, Chile, Colombia, Costa Rica, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Israel, Ireland, Italy, Japan, Korea, Latvia, Lithuania, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, United Kingdom, and United States.
NON-MEMBER ECONOMIES: Argentina, Brazil, Bulgaria, China, Croatia, Cyprus, Malta, Romania, Russian Federation, South Africa, and Thailand.
TERRITORIAL COVERAGE OF LATEST EDITION:
- In response to Russia's large-scale aggression against Ukraine, the OECD Council decided on 8 March 2022 to immediately suspend the participation of Russia and Belarus in OECD bodies. In view of this decision, the OECD suspended its solicitation of official statistics on R&D tax incentives from Russian authorities, leading to the absence of more recent statistics on R&D tax subsidy rates for this country in the OECD database, while previously compiled data are still available. In the case of Russia, the estimates of implied marginal R&D tax subsidy rates reported for 2022 draw on information collected through OECD desk based research and are not based on officially transmitted information.
- In the case of China, the estimates of implied marginal R&D tax subsidy rates reported for 2018 to 2022 in this OECD database draw on information collected through OECD desk based research and are not based on officially transmitted information.
The OECD R&D Tax Incentives database presents the 2022 edition of OECD time-series indicators of implied R&D tax subsidy rates for OECD member countries and eleven non-member economies (Argentina, Brazil, Bulgaria, People's Republic of China, Croatia, Cyprus, Malta, Romania, Russian Federation, South Africa, and Thailand) over the period 2000-2022, drawing on data collected in the OECD-NESTI R&D tax incentive surveys from 2007 to 2022. The 2022 edition of RDTAXSUB contains time-series estimates that are based on headline tax credit and allowance rates, by firm size and profitability scenario. Due to limited historical data availability, the estimates are not adjusted for provisions that bound the tax benefits received by firms (e.g. ceilings, thresholds). They therefore provide an upper bound for the marginal tax subsidy implied by R&D tax relief measures at central government level across countries over time. These estimates should not be confused with separate contemporary cross-sectional OECD estimates of marginal tax subsidy rates (OECD, 2023) that compute adjusted (weighted) tax credit/allowance rates for a number of countries based on available information on the proportion of eligible R&D subject to different marginal levels of relief.
The tax subsidy rate is defined as 1 minus the B-index, a measure of the before-tax income needed by a “representative” firm to break even on USD 1 of R&D outlays (Warda, 2001). As tax component of the user cost of R&D, the B-Index is is directly linked to measures of effective marginal tax rates. Measures of tax subsidy rates such as those based on the B-index provide a convenient proxy for examining the implications of tax relief provisions. These provide a synthetic representation of the generosity of a tax system from the perspective of a generic or model type of firm for the marginal unit of R&D expenditure. To provide a more accurate representation of different scenarios, B-indices are calculated for “representative” firms according to whether they can claim tax benefits against their tax liability in the reporting period (OECD, 2013). When credits or allowances are fully refundable, the B-index of a firm in such a position is identical to the profit scenario. Carry-forwards are modelled as discounted options to claim incentives in the future, assuming a constant annual probability of returning to profit of 50% and a nominal discount rate of 10%.
For general and country-specific notes on the time-series estimates of implied marginal tax subsidy rates on R&D expenditures (based on the B-index), see http://www.oecd.org/sti/rd-tax-stats-bindex-notes.pdf.
Comments or questions regarding RDTAXSUB can be sent to RDTaxStatsContact@oecd.org.
OECD R&D tax subsidy (RDTAXSUB) dataset 2022/2
OECD R&D Tax Incentives database; https://oe.cd/rdtax
YEARS COVERED: 2000 onward.
Release date: 7 April 2023
The latest indicators and information on R&D tax incentives also feature on the dedicated OECD website Measuring R&D tax incentives, including the latest edition of OECD R&D tax incentive country profiles.
COUNTRIES COVERED: Australia, Austria, Belgium, Canada, Chile, Colombia, Costa Rica, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Israel, Ireland, Italy, Japan, Korea, Latvia, Lithuania, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, United Kingdom, and United States.
NON-MEMBER ECONOMIES: Argentina, Brazil, Bulgaria, China, Croatia, Cyprus, Malta, Romania, Russian Federation, South Africa, and Thailand.
TERRITORIAL COVERAGE OF LATEST EDITION:
- In response to Russia's large-scale aggression against Ukraine, the OECD Council decided on 8 March 2022 to immediately suspend the participation of Russia and Belarus in OECD bodies. In view of this decision, the OECD suspended its solicitation of official statistics on R&D tax incentives from Russian authorities, leading to the absence of more recent statistics on R&D tax subsidy rates for this country in the OECD database, while previously compiled data are still available. In the case of Russia, the estimates of implied marginal R&D tax subsidy rates reported for 2022 draw on information collected through OECD desk based research and are not based on officially transmitted information.
- In the case of China, the estimates of implied marginal R&D tax subsidy rates reported for 2018 to 2022 in this OECD database draw on information collected through OECD desk based research and are not based on officially transmitted information.