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Directorate for Science, Technology and Innovation www.oecd.org/December2019
For more information, please visit: http://oe.cd/rdtax Contact us at: [email protected]
R&D Tax Incentives : Denmark, 2019 Design features
Table 1. Main design features of R&D tax incentives in Denmark, 2019†
R&D tax credit for deficit related R&D expenses
Enhanced R&D tax allowance Accelerated Depreciation
Tax incentive* Tax credit Tax allowance Accelerated Depreciation
of R&D capital
Type of instrument Volume-based Volume-based
Eligible expenditures† Current, depreciation Current, depreciation Machinery and equipment
Headline rates (%) 22 (corporate income tax rate) 1.5 (income years 2018-19)* 100
Refund Yes (deficit related R&D expenses)
Carry-over (years) n.a. Indefinite
Ceilings R&D expenditure (Refund-specific)
DKK** 5.5 million (22% of DKK 25 million) per year
*This rate is raised to 3% in 2020, 5% in 2021-22, 8% in 2023-25, and 10% in income year 2026. ** 1 DKK= 0.134 EUR (Q3 2019)
Recent developments and trends
Figure 1. Implied tax subsidy rates on R&D expenditures: Denmark, 2000-19 1-B-Index, by firm size and profit scenario
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-0.03
-0.01
0.01
0.03
0.05
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
1-B-index Large, Profitable SME, Profitable Large, Loss-Making SME, Loss-Making
Directorate for Science, Technology and Innovation www.oecd.org/December2019
For more information, please visit: http://oe.cd/rdtax Contact us at: [email protected]
Public support for business R&D: the policy mix
Figure 2. Direct government funding of business R&D and tax incentives for R&D, 2017 (nearest year) As a percentage of GDP
Trends in government support for business R&D
Figure 3. Direct government funding of business R&D and tax incentives for R&D, Denmark, 2000-17 As a percentage of GDP, 2010 prices (right-hand scale)
0.00
0.10
0.20
0.30
0.40
0.50
0.60
% Direct government funding Tax incentive support Subnational tax incentive support Total 2006 (excl. subnational tax support)
* Data on tax support not available, ** Data on subnational tax support not available
0
50
100
150
200
250
300
350
400
450
0.00
0.01
0.02
0.03
0.04
0.05
0.06
0.07
0.08
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
2010DKKm % Direct funding Tax incentive support Data on tax support not available
Direct funding imputed R&D tax support (right-hand scale)
The cost estimate of tax incentive support covers the R&D tax credit