The OECD has expanded its INNOTAX portal to cover both expenditure- and income-based R&D tax incentives across more than 50 jurisdictions, providing a broader view of how countries use tax measures to support research, innovation, and investment.
The Organisation for Economic Co-operation and Development (OECD) announced in September 2026 the launch of an updated version of its INNOTAX portal, a comprehensive database tracking tax incentives for research and development across more than 50 jurisdictions. The enhanced platform now includes income-based tax incentives alongside the expenditure-based tools that formed its original foundation.
How R&D tax incentives work
Governments deploy two main categories of tax support to encourage business investment in research and innovation. Expenditure-based incentives reduce the cost of R&D activities as they occur through mechanisms like tax allowances and credits. Income-based incentives operate differently, rewarding successful innovation by lowering taxes on revenue that stems from R&D work. Examples include patent boxes and reduced tax rates applied to innovative businesses.
The OECD’s expanded portal now documents both approaches, recognising that jurisdictions often combine expenditure and income support or select one approach depending on their policy objectives. Additional funding mechanisms, such as direct government grants, frequently complement these tax measures.
Different structures, different outcomes
Tax relief for R&D takes multiple structural forms. Allowances, exemptions, and deductions all reduce the tax base before calculating liability, thereby lowering overall tax owed. Tax credits operate at a later stage, reducing the final tax amount after liability has been calculated. Accelerated depreciation provisions let businesses write off or depreciate R&D capital faster, providing upfront tax relief rather than spreading deductions over time.
R&D incentive programs also vary in scope. Volume-based programs apply to all qualified expenditures, while incremental programs target only spending that exceeds a baseline calculated from historical R&D levels. Some jurisdictions combine both approaches in hybrid models.
The expanded INNOTAX database now enables comparison of these structural differences across jurisdictions, helping policymakers and businesses understand how tax design shapes innovation outcomes globally.
