Tax incentives dominate company R&D support in OECD countries

29 Apr 2025 | News
R&D Funding

After a steady increase over the past two decades, 55% of company R&D support in the OECD is now provided through tax incentives

By Goda Naujokaitytė

Photo credits: BigStock

Tax incentives are now the preferred form of government support for company R&D in OECD countries, with close to 55% of total support offered this way. Twenty-three OECD countries provide more R&D support through tax incentives than they do through grants, according to the latest OECD analysis.

Out of the 38 OECD countries, only Costa Rica, Israel, Latvia and Luxembourg do not offer tax incentives for R&D.

Among the EU members of the OECD, the most intense user of tax incentives is Portugal. As of 2023, it’s tax support for businesses equates to around 0.39% of the country’s GDP. In contrast, direct support hovers at around 0.07%. 

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