R&D is a common tax incentive provided by jurisdictions. The question for the purposes of Pillar Two is to what extent it will lead to a reduction in the GloBE effective tax rate, and potentially lead to additional top-up tax.
Our Global R&D Effective Tax Rate Map highlights two metrics on a jurisdictional basis:
Firstly, the Effective Average Tax Rate for R&D; and
Secondly, the Preferential Tax Treatment Rate for R&D. This aims to determine by how much R&D tax incentives reduce the tax payable on R&D investments.
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