KPMG is happy to present our Global R&D Incentives Guide. This guide provides an overview of R&D incentives available throughout the world, highlighting incentives that could present significant value to your organization.
Research and Development (R&D) tax incentive schemes are widely adopted in advanced economies. As more countries have recognized the importance of research and innovation for economic growth, they have added R&D incentives and increased their support of R&D using grants and other forms of funding. Currently, over 50 jurisdictions have some form of an R&D incentive, and some countries offer multiple R&D incentives.
The effectiveness of R&D tax incentives has been the subject of much global debate and is well documented in academic studies and research. Although some early studies challenged the effectiveness of R&D incentives, the majority of the studies find that R&D incentives increase private investment and innovation, influence the location where companies conduct R&D and in turn manufacture their products, and also lead to a number of societal benefits.
For each jurisdiction and primary incentive, the KPMG Global R&D Incentives Guide provides the following:
Belgium is a prime location for companies involved in R&D activities and in the exploitation of patents. Belgium offers a full range of tax incentives enabling companies to structure their R&D activities, as well as the valorization of the intellectual property resulting from R&D activities, in a tax efficient way. This comprehensive R&D regime consists of tax deductions on qualifying intellectual property income, deductions on R&D investments and (refundable) tax credits, cash savings on payroll cost of researchers, and full tax exemption of R&D subsidies.
On February 2, 2017, the Parliament introduced the so-called “Deduction for Innovation Income.” The new regime has a broader application than the old patent income deduction while meeting the concerns of the OECD and EU as laid down in the so-called modified nexus approach.
The R&D Incentives practice at KPMG is comprised of a cross-border network of experienced engineers, accountants, and tax professionals located in member firms around the world. Addressing local issues with a global mindset, the mission of the practice is to help our clients maximize R&D incentives and benefits on a global scale to help create a competitive advantage.
Our network of professionals assists our clients in identifying, realizing, and substantiating significant tax savings related to their investments in R&D in various countries. Our approach includes a coordinated multijurisdictional R&D incentives review and analysis. Our professionals think beyond tax and aim to provide our clients with insightful business strategies that help enable the identification and documentation of R&D activities on a real-time basis, thereby maximizing benefits and driving higher returns on investments.
Decisions on where to conduct R&D activities involve many factors, including the availability of the necessary talent and the relative costs of labor, materials and facilities. In addition, R&D incentives and the impact of the R&D costs on other tax positions may play a significant role in evaluating the after-tax cost of performing R&D in one country versus another.
Accordingly, our R&D Incentives team works to help clients manage taxation issues arising from:
The KPMG network ideally positions us to assist our clients in creating long-lasting value by evaluating both the available R&D incentives and the impact of R&D investments on overall tax posture relative to the business lifecycle.
For additional information regarding these services, do not hesitate to contact us.