COMPENDIUM OF R&D TAX INCENTIVE SCHEMES: …

1 MEASURING R&D TAX incentives COMPENDIUM OF R&D TAX INCENTIVE SCHEMES: OECD countries AND selected economies , 2017 For further information: Contact: Publication date: November 2017 MEASURING R&D TAX incentives ii COMPENDIUM OF R&D TAX INCENTIVE SCHEMES: OECD countries AND selected economies , 2017 This file contains information on the design, scope and approval of R&D tax INCENTIVE relief for OECD countries and selected economies with reference to tax relief provided for R&D expenditures incurred in 2017 . It is based on the results of the 2017 OECD Questionnaire launched in summer 2017 by the OECD Working Party of National Experts on Science and Technology Indicators (NESTI) and other members of the extended OECD-NESTI R&D tax INCENTIVE network.

2 The 2017 OECD-NESTI questionnaires were prefilled with information from past NESTI R&D tax incenitve surveys and other relevant, publicly available information. Please cite as: OECD ( 2017 ). COMPENDIUM of R&D tax INCENTIVE schemes: OECD countries and selected economies , 2017 , , retrieved on <<DD/MM/YY>>. Note: Tax credit and allowance rates (measured in %) generally denote enhanced rates of tax support measured relative to a common benchmark (full deductibility of current R&D (100%) expenditures and a country s baseline treatment of capital investments). TABLE OF CONTENTS pp. pp. Survey response status iii Korea 115-118 How to read the table iv-v Latvia 119-122 R&D tax INCENTIVE schemes Lithuania 123-126 Argentina 6-18 Mexico 127-130 Australia 8-17 Netherlands 131-139 Austria 18-21 New Zealand 140-145 Belgium 22-30 Norway 146-150 Brazil 31-33 Poland 151-161 Canada 34-43 Portugal 162-165 Chile 44-49 Romania 166-172 China 50-56 Russian Federation 173-181 Czech Republic 57-59 Slovak Republic 182-188 Denmark 60-63 Slovenia 189-191 France 64-74 South Africa 192-195 Greece 75-77 Spain 196-206 Hungary 78-84 Sweden 207-209 Iceland 85-88 Turkey 210-215 Ireland 89-93 United Kingdom 216-226 Italy

3 94-103 United States 227-233 Japan 104-114 References 234 MEASURING R&D TAX incentives iii Response status to 2017 NESTI Questionnaire and follow-up Country Country ISO code Response Status Country Country ISO code Response Status Argentina ARG Yes Japan JPN Yes Australia AUS Yes Korea KOR Yes Austria AUT Yes Latvia LVA Yes Belgium BEL Yes Lithuania LTU Yes Brazil BRA Yes Luxembourg LUX No return Bulgaria BGR Yes Malta MLT No return Canada CAN Yes Mexico MEX No return Chile CHL Yes Netherlands NLD Yes China CHN No return New Zealand NZL Yes Croatia HRV Yes (partial) Norway NOR Yes Cyprus CYP Yes Poland POL Yes Czech Republic CZE Yes Portugal PRT Yes Denmark DNK Yes (partial) Romania ROU No return Estonia EST Yes Russian Federation RUS Yes (partial) Finland FIN Yes Slovak Republic SVK Yes France FRA Yes Slovenia SVN Yes Germany DEU Yes South Africa ZAF No return Greece GRC Yes Spain ESP Yes Hungary HUN Yes Sweden SWE Yes Iceland ISL No return Switzerland CHE Yes Ireland IRL Yes Turkey TUR Yes (partial) Israel ISR Yes United Kingdom GBR Yes Italy ITA Yes United States USA Yes Back to table of contents MEASURING R&D TAX incentives iv How to read the table Abbreviations: C=Current; ME=Machinery and equipment.

4 B=Buildings; MED=Machinery and equipment depreciation; BD=Building depreciation General Country Country name Reference year 2017 in most cases, unless abolished scheme Type of Scheme R&D tax credit/ allowance / payroll withholding tax / social security contribution / accelerated depreciation of R&D capital Scheme name/description As appropriate, if available Status in 2017 in force in 2017 /abolished/not known Enforcing law/regulation Law/regulation enforcing R&D tax relief measure (where indicated) Design Expense Base Type of R&D costs allowed by scheme, see list of abbrevations provided at the top of this table Deducted from Tax / taxable income Vol-based rate Large firm Relevant percentage rate (allowances=100% for baseline deduction) Vol-based rate SME Relevant percentage rate (allowances=100% for baseline deduction) Incremental rate Large firm Relevant percentage rate Incremental rate SME Relevant percentage rate Base amount (if incremental) Definition of baseline amount applicable Thresholds Variation in level of tax support depending on amount of eligible R&D expenditure (upper and lower)

5 Ceilings Limits to tax support ( in terms of eligible R&D expenditure or tax relief) Special rate SMEs Yes/No as applicable Special refund provision SMEs Yes/No as applicable Special terms for collaboration Yes/No, further details as applicable Refund Large firm (in Yrs) Blank if not available, otherwise after how many years (or number of installments) Refunds SME (in Yrs) Blank if not available, otherwise after how many years (or number of installments) Limitations Limitations on the refundable amounts Carry-forward (in Yrs) Number of years benefits can be carried back Carry-back (in Yrs) Number of years benefits can be carried forward Limitation Limitations on the amounts that can be carried over MEASURING R&D TAX incentives v Taxability of R&D tax relief Whether tax benefits represent taxable income Grant-funded R&D projects Eligibility and terms under which grant-funded R&D projects qualify for tax support Subcontracting rules Terms under which businesses (as funders or performer) can claim tax relief in the case of R&D subcontracting Aggregation rules Rules applicable in computing the R&D tax INCENTIVE benefits of companies that are part of a group Definition of eligible taxpayer Defintion of taxpayers ( SMEs)

6 That qualify for the R&D tax INCENTIVE Additional Comments As provided by respondent or as per prefill information R&D Definition Other S&T&I Whether definition allows for S&T&I expenditures which are not R&D Note As applicable SSH Whether R&D in social sciences and humanities is eligible. Note As applicable Eligible R&D Wages and salaries Whether R&D W&S are allowed by scheme Note As applicable R&D services Whether payments to third parties for R&D services are allowed by scheme Note As applicable Consumables Whether expenditures on R&D consumables are allowed by scheme Note As applicable M&E Whether expenditures on the acquisition of plant, machinery or equipment for R&D are allowed by scheme Note As applicable Land and buildings Whether expenditures on the acquisition of land and buildings for R&D are allowed by scheme Note As applicable Depreciation Whether the amortisation cost of R&D assets is allowed.

7 Note As applicable R&D labour paid by 3rd parties Whether expenditures on internal R&D personnel paid for by third parties are allowed by scheme R&D services incurred abroad Whether expenditures on R&D services incurred abroad are allowed by scheme Open-ended note General comments as provided. Back to table of contents MEASURING R&D TAX incentives 6 ARGENTINA, 2017 Type of Scheme R&D tax credit Scheme name/description Status in 2017 In force in 2017 Enforcing law/regulation Law No. , Art. 9, letter b) and Decrees 270 (March 11, 1998) and 555 (July 7, 2000) Design Expense Base C, ME, intangibles Deducted from Tax Vol-based rate Large firm No universal rate (see additional comments) Vol-based rate SME No universal rate (see additional comments) Incremental rate Large firm Incremental rate SME Base amount (if incremental) Thresholds - Ceilings A company may claim tax relief for multiple projects as long as the sum of the costs of these projects does not exceed ARS 7 million.

8 The amount of R&D tax relief must not exceed 50% of total project cost (total project costs are capped at ARS 7 million). R&D tax credits can be used by firms to offset their CIT obligations depending on the amount of their annual CIT liability according to the following cumulative scale: - Firms with CIT liability from ARS 0 to million can offset up to 100% of CIT; - Firms with CIT liability from ARS to million can offset ARS million of CIT liabilities PLUS up to 80% of CIT liabilities above ARS million; - Firms with CIT liability from ARS to 1 million can offset ARS million of CIT liabilities PLUS up to 60% of CIT liabilities above ARS million.

9 - Firms with CIT liability from ARS 1 to 5 million can offset ARS million of CIT liabilities PLUS up to 40% of CIT liabilities above ARS 1 million; - Firms with CIT liability from ARS 5 to 10 million can offset ARS millions of CIT liabilities PLUS up to 20% of CIT liabilities above ARS 5 million; - Firms with CIT liability above ARS 10 million can offset ARS million of CIT liabilities PLUS up to 10% of CIT liabilities above ARS 10 million. Any unused R&D tax credit which is not used before its validity date will be lost. Source: Projects must be completed in 36 months at the latest. Any unused credits after this period will be lost. Total national budget for R&D projects is ARS 48 million plus any amount allotted by the respective authority in charge of the application of the relief, according to the corresponding National Budget.

10 Source: Special rate SMEs No MEASURING R&D TAX incentives 7 ARGENTINA, 2017 Type of Scheme R&D tax credit Special refund provision SMEs No Special terms for collaboration Refund Large firm (in Yrs) No Refunds SME (in Yrs) No Limitations Carry-forward (in Yrs) Carry forward for up to 3 years. Carry-back (in Yrs) - Limitation The certified amount of tax relief is payable in three instalments over a period of 36 months, with a validity of the first, second and third instalment for a period of three, two and one year, respectively. Taxability of R&D tax relief Grant-funded R&D projects Taxpayers benefiting from other support provided by the Agency for the same project are not eligible for the R&D tax credit Subcontracting rules Aggregation rules Expenditures incurred through related firms