Tax Breaks for Private Research and Development Activities: Empirical Evidence and Open Research Questions

The majority of OECD member countries has either newly introduced tax breaks for private research and development (R&D) activities or has expanded existing structures. Germany and Switzerland are among the few research-intensive countries that currently fund private R&D exclusively via project-related subsidies. This is just one of the reasons why a growing number of voices in Germany are calling for the introduction of a tax-break subsidy system for R&D. This article summarises the key results of empirical evaluation studies that consider the causal effectiveness of the tax-break R&D subsidy systems implemented in other countries.