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R&D Incentives Can Slash Effective Tax Rates, OECD Paper Says

July 29, 2021, 9:04 AM

Tax incentives for research and development reduce companies’ effective tax rates by an average of 8.8 percentage points among countries where they’re used, according to an OECD working paper released Thursday.

The working paper from the Organization for Economic Cooperation and Development examines how tax incentives shape corporate decisions on investing in R&D, in the wake of a steady increase in the use of these incentives over the past two decades. The paper focuses on how the incentives affect companies’ effective tax rates, which are intended ...

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