Work detail

Patent box regimes: Evaluation of ex post tax incentives effects on innovating activity

Author: Bc. Markéta Červená
Year: 2019 - summer
Leaders: doc. Petr Janský Ph.D.
Work type: Bachelors
Language: English
Pages: 53
Awards and prizes:
Abstract: The aim of this thesis is to compare the impacts of patent box introduction on
R&D and patenting activity with impacts generated by equivalent change in
corporate income tax rate in order to evaluate whether the patent boxes in general succeed in targeting the tax benefit efficiently on the R&D fostering. Using
OECD country-level data panel consolidated from various sources, incl. the
PATSTAT database, three different metrics that altogether capture the overall
R&D (i.e. actual innovation generating activity) and patenting (i.e. intangible
asset generating activity) situation were defined and computed. The SURE
(Seemingly unrelated regression equations) estimation method is then used to
study those metrics in the context of relevant macroeconomic, R&D and tax
indicators, concluding that both, the patent box regime and the statutory corporate income tax rate decline have positive impact on R&D and patenting
activity, while the effect issued from a patent box introduction tends to be
moderated. Despite a special attention given to the comparison of magnitudes
of the actual innovation fostering effect and the patent shifting effect associated
with the policy change, the analysis was partially inconclusive on this point. In
case of patent box regime, the patent shifting effect seems to be dominant, while
in case of statutory corporate income tax rate reduction, the result is ambiguous.
June 2023


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