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Analyse critique des incitants fiscaux à la RD des entreprises

Author

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  • Bruno Van Pottelsberghe
  • Esmeralda Megally
  • Steve Nysten

Abstract

This paper provides an in-depth and critical analysis of the current Belgian fiscal regime towards business research and development (R&D) expenditures. The paper clearly shows that what matters the most is the way a policy decision is implemented. In this respect the current R&D tax credit scheme is subject to several drawbacks. The first one is the very low level of support for ‘additional’ researchers. The second one is the ‘nominative’ aspect of each tax credit: the deduction is allowed for well-defined employees. The third main drawback is the non-permanent characteristic of the tax credit. Once a deduction is allowed for an employee, it must be validated for each subsequent year. These drawbacks are associated with a high level of complexity and a heavy administrative burden, for a weak or zero effectiveness of the scheme. We suggest several avenues for improvement, including a drastic simplification of the policy design and a much higher generosity, especially if the Lisbon objective is to be reached.

Suggested Citation

  • Bruno Van Pottelsberghe & Esmeralda Megally & Steve Nysten, 2004. "Analyse critique des incitants fiscaux à la RD des entreprises," Working Papers CEB 04-012.RS, ULB -- Universite Libre de Bruxelles.
  • Handle: RePEc:sol:wpaper:04-012
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    References listed on IDEAS

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    1. Black, Fischer & Cox, John C, 1976. "Valuing Corporate Securities: Some Effects of Bond Indenture Provisions," Journal of Finance, American Finance Association, vol. 31(2), pages 351-367, May.
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    3. Jackwerth, Jens Carsten, 2000. "Recovering Risk Aversion from Option Prices and Realized Returns," Review of Financial Studies, Society for Financial Studies, vol. 13(2), pages 433-451.
    4. Robert C. Merton, 2005. "Theory of rational option pricing," World Scientific Book Chapters,in: Theory Of Valuation, chapter 8, pages 229-288 World Scientific Publishing Co. Pte. Ltd..
    5. Jackwerth, Jens Carsten & Rubinstein, Mark, 1996. " Recovering Probability Distributions from Option Prices," Journal of Finance, American Finance Association, vol. 51(5), pages 1611-1632, December.
    6. Black, Fischer & Scholes, Myron S, 1973. "The Pricing of Options and Corporate Liabilities," Journal of Political Economy, University of Chicago Press, vol. 81(3), pages 637-654, May-June.
    7. Rubinstein, Mark, 1994. " Implied Binomial Trees," Journal of Finance, American Finance Association, vol. 49(3), pages 771-818, July.
    8. Mark Rubinstein., 1994. "Implied Binomial Trees," Research Program in Finance Working Papers RPF-232, University of California at Berkeley.
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    Cited by:

    1. Bruno Van Pottelsberghe De La Potterie, 2004. "Les politiques de science et technologie et l'objectif de Lisbonne," Reflets et perspectives de la vie économique, De Boeck Université, vol. 0(1), pages 69-86.

    More about this item

    Keywords

    R&D tax credit; fiscal policy; policy design; research expenditures.;

    JEL classification:

    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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