The Relationship between Technology Innovation and Tax Reduction/Exemption
Asian Tax Journal Vol. 16 No. 3 (2015), pp. 171-190
Abstract
Expenditure on research and development is not only increase productivity, there by bringing improvements in technology, research and development are experiencing positive externality and indirectly by contributing to economic growth when be successful. Therefore, there was the government’s investment in research and development continues to increase, the problem raised about the effectiveness of these government investments are being made on an ongoing basis. As the advent of limitations of the tax exemption system developed according to a recent study whether to extend these tax credit schemes, and a discussion of the appropriateness of that reduction targets are being made. This study analyzed how the impact on innovation in government R&D tax credit is one of the technological development of the investment company for such research and development. Results First, when the entire industry was analyzed the effect of targeted tax credit technology, showed that a significant positive impact on the company’s technological innovation. However, the analysis were divided into large and small businesses, large companies have had a significant effect did not appear, only in the case of small businesses showed that a significant positive effect. Second, as a result of technological innovation indicators for further analysis using the patents in technology development tax relief appeared to be on a significant positive impact on innovation. Such a result would be that the decision to extend the prescription of these tax credit scheme as tax credit schemes for research and development are coming age, a bar that contribute to the provision in the policy relevance of that reduction targets.
Keywords
- Innovation
- Technology Research & Development
- tax reduction or exemption
- special taxation
- taxation. tax law
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