A new study from the Information Technology and Innovation Foundation examines the generosity of R&D tax incentives across 42 countries. Ireland is ranked 18^th in the SME sector and number 22 in the large enterprise sector while the UK is ranked number 25 in the SME sector and number 9 in the large enterprise sector.

India leads the world in R&D tax “generosity” for both the SME sector and large enterprise sector by allowing a 200% super deduction for in-house R&D expenditures, a super deduction of 125% to 200% for payments made to contractors carrying out R&D in India, and a 100% deduction for R&D expenses that do not otherwise qualify for the other deductions.

France comes in second for SMEs and fourth for large firms by offering an R&D tax credit equal to 30% of the first €100 million of eligible R&D expenditure and then 5% beyond that. By contrast Germany comes in last out of the 42 countries studied in both the small and large enterprise sectors. Their position at both these extremes illustrates how for France and Germany, the most strident critics of our Corporation Tax policy, corporation tax itself is something of a minority sport.

For details of the study see http://www2.itif.org/2012-were-27-b-index-tax.pdf