Based on a comparative analysis of 15 country reports, the Study offers a common interpretation of R&D and R&D expenditure and aims to strengthen pan-European Union R&D activities through a uniform approach to R&D, and thereby contributes to economic activity by removing barriers to the Single Market.

The ELI Study might feed into the European Commission’s proposal for a Common Corporate Tax Base (CCTB) directive. The latter aims at establishing a single set of rules for calculating the corporate tax base in the EU Member States that should improve the Single Market for businesses by reducing administrative burdens, compliance costs and tax obstacles for companies operating in multiple Member States. The CCTB defined R&D, but did not address many existing discrepancies between national tax laws, including what would constitute R&D expenditure. This lack of certainty as to what constitutes R&D means that there is no uniformity within the EU as to what costs are eligible for R&D tax incentives. The CCTB proposal did not, therefore, remedy the theoretical and practical problems arising from varying national definitions of R&D and, in this regard, was a missed opportunity to provide a legal environment conducive to R&D.

With CCTB being still at the stage of negotiation, the ELI Study has the potential to revive the discussion on the proposal and in any case to standardise the approach towards R&D tax incentives throughout the EU.

ELI wishes to express its gratitude to the Project Reporter, Georges Cavalier, the Project Team, Advisors and National Correspondents for their efforts on completing this important work.

You can read the full Study here.