Monday, August 31, 2015
Howdy from the 2015 IFA Congress, IFA's 69th Annual Congress since 1938! 2,000 international tax senior leaders from 100+ countries to discuss pertinent international tax challenges impacting global trade and investment.
Today's primary comparative tax study of 80+ countries is Subject I: TAX INCENTIVES ON RESEARCH AND DEVELOPMENT (R&D), followed by the Academic Luncheon
Research and development (R&D) to encourage “innovation” is generally regarded as a key element of economic growth. Many countries have adopted policies to encourage research and innovation, and as a companion seminar, the “Patent Boxes” discussion will investigate how countries have sought to institutionalize an R&D focus in different ways.
Increasingly, countries employ general and targeted R&D tax incentives to encourage R&D expenditure (“input incentives”) or reduce effective taxation on income from R&D activity (“output incentives”).
The discussion panel will first explore the policy objectives underlying tax incentives for R&D, with a focus on how R&D is defined for this purpose and the challenges of targeting any such exclusively at R&D which requires an incentive.
The panel will compare and contrast the different approaches used by countries to provide incentives, including input and output incentives, their effectiveness in serving the policy objectives and their compatibility with obligations under treaties, other international agreements and emerging standards of harmful or inappropriate tax competition.
Attention will also be directed towards constraints under EU law. The panel will use examples from countries’ experiences to determine whether experience to date can offer guidance as to when incentives are successful or unsuccessful in relation to policy objectives and to evaluate which incentives may give rise to action or counter-measures under emerging international standards for harmful tax practices.
General reporter: Robert Danon (Switzerland)
Chair: Prof. Stephen Shay (Harvard, USA)