The EU tax treatment competition for knowledge based capital - the special case of RD

摘要

Globalization spurs the knowledge diffusion and encourages firms to incorporate investments in innovation in their portfolios because knowledge based capital (research & development, intellectual property, organisational capital, skills etc.) is a key driver for competitiveness at all levels. This article aims to emphasize the differences in the R&D tax policy mix as a proxy for the knowledge based capital and analyse some R&D indicators for a number of 20 EU state members' countries in order to sort and classify those countries in terms of R&D tax policy effectiveness. Moreover this paper highlights the need for designing a tax policy that promote innovation and gauge the loopholes of the tax system that activate profit shifting strategies.