Tax breaks not the key to big business R&D

R&D tax incentives are not the best way to encourage multinational firms to invest in European research, an independent analysis has found.

Tax breaks for companies investing in research are more effective for small companies than bigger ones, the analysis, conducted by the Horizon 2020 Policy Support Facility, revealed.

As part of an effort to stimulate innovation, the European Commission proposed the launch of an EU-wide R&D tax incentive in 2016. However, the facility’s working paper published on 21 September cautions that while such a policy could encourage multinational companies to invest in Europe, there are more important factors that attract such firms.