R&D Tax Credit Utilization Rates Across Countries [Stat Breakdown]

R&D tax credits are one of the most powerful tools governments use to drive research, development, and innovation. They reduce the actual cost of innovation by helping companies recoup part of their spending. But here’s the catch: not every company that qualifies for these incentives actually takes advantage of them.

1. United States: Approx. 85% of eligible large corporations utilize the R&D tax credit annually

A powerful tool that large businesses actually use

In the United States, the R&D tax credit has been around since the early 1980s. It’s been expanded and extended many times since then, becoming a permanent part of the tax code in 2015. The result? Awareness among big corporations is strong, and about 85% of those who qualify are filing claims.

Why the utilization rate is high

There are a few key reasons large businesses in the U.S. are good at claiming the credit:

• Most large firms have dedicated tax departments.
• Many of them work with consultants who specialize in R&D tax credit claims.
• The IRS has clarified many aspects of eligibility over time, reducing uncertainty.

For large companies that spend heavily on R&D, claiming the credit is just smart business.

Actionable insights for smaller businesses

Even though big businesses are doing this right, many small and medium enterprises (SMEs) in the U.S. still miss out. If you’re in that category, here’s what you should consider:

• You don’t need to be in a lab or wear a white coat. If you’re improving products or processes, you might qualify.
• Don’t assume it’s too complicated. There are now software tools and small accounting firms that specialize in helping SMEs.
• Keep detailed records—track who worked on what and when. It makes the claim much easier.

Think of the R&D tax credit as a way to lower the true cost of your innovation. If you’re not claiming it, you’re leaving money on the table.

2. Canada: Over 90% of SMEs that qualify for SR&ED program submit claims

Canada’s approach to supporting innovation at scale

Canada has one of the most generous R&D tax incentive programs in the world—the Scientific Research and Experimental Development (SR&ED) program. What’s even more impressive is that over 90% of small and medium-sized companies that qualify are making claims.

What makes Canada different?

The Canadian government has done a few things right:

• The SR&ED credit is refundable for many SMEs. That means even if you’re not profitable, you can get cash back.
• There’s strong awareness thanks to years of consistent government messaging.
• Local tax professionals are well-versed in navigating SR&ED.

These elements work together to create an environment where small businesses not only understand the benefit—they actively go after it.

How you can learn from this, even if you’re not in Canada

Whether you’re based in Canada or elsewhere, here are some smart takeaways:

• Government messaging matters. Push your local trade groups to educate members.
• Refundable credits drive uptake. If you’re in government, make that a priority.
• File even if you’re in the red. Many programs support pre-revenue firms.

Canadian SMEs treat R&D tax credits as a must-have, not a nice-to-have. That mindset shift can make all the difference.

3. United Kingdom: Utilization rate for SMEs exceeds 95% under the RDEC and SME schemes combined

UK leads in awareness and access

The UK government offers two major R&D tax credit schemes: one for large companies (RDEC) and one for SMEs. Together, they’ve created a system where over 95% of eligible SMEs are filing claims. That’s a benchmark many countries are still far from reaching.

Why it works so well in the UK

A few reasons stand out:

• HMRC has created extensive public guidance, making the rules relatively clear.
• The credit can be claimed even for failed projects, which encourages risk-taking.
• The process can be handled through common accounting platforms or with the help of niche R&D tax advisors.

The UK government also updates the program frequently to reflect changing tech and innovation trends. That keeps it relevant.

What can businesses learn?

• Review your activities regularly. Many businesses don’t realize what counts as R&D.
• If you’re not claiming, check your competitors—they probably are.
• If you’re outside the UK, study their policies and suggest similar reforms in your home country.

Even if you’re a one-person tech startup, the UK makes it easy to get your R&D costs partially reimbursed. It’s a policy designed for growth from the ground up.

4. France: CIR (Crédit d’Impôt Recherche) is utilized by nearly 80% of R&D-intensive firms

A long-standing incentive with strong corporate uptake

France’s R&D tax credit, known as the Crédit d’Impôt Recherche (CIR), is one of the most generous in Europe. Offering a 30% credit on R&D expenditures up to €100 million, it’s been a foundational part of France’s innovation policy for decades.

With close to 80% of R&D-intensive firms making use of it, France shows how long-term policy stability and high-value benefits can lead to strong adoption.

Why French companies claim the CIR

The reasons for high usage are straightforward:

• The CIR is well established and embedded in the corporate tax strategy of many firms.
• French companies view it as a competitive necessity.
• The French government has simplified eligibility definitions over the years to increase clarity.

Another factor is predictability. Unlike some countries where policy changes frequently, France’s CIR has seen gradual improvements rather than disruptive changes. That stability encourages confidence.

What other countries can learn

If you’re in a market where few businesses take advantage of R&D tax credits, look at what France has done right:

• Make the incentive worth it. A low-percentage benefit won’t move the needle.
• Ensure the program is predictable year after year.
• Offer comprehensive guides and training for accountants and CFOs.

If you’re a business in France not using CIR, you might be lagging behind competitors. It’s a vital piece of financial strategy, not just a tax afterthought.

And if you’re outside France, study the CIR framework—it’s a model that balances generosity with accountability.

5. Germany: Utilization rate of new R&D tax incentive (introduced in 2020) reached 55% among eligible firms by 2023

Germany’s new player in the tax incentive space

Germany was surprisingly late to introduce a formal R&D tax incentive. It wasn’t until 2020 that the “Forschungszulage” was launched. But since then, its adoption has been steadily climbing. By 2023, about 55% of eligible companies had taken part.

That’s a strong start for a new program—and it shows momentum is building.

Why adoption isn’t yet higher

Even though Germany has a world-class research sector, the slow start to this credit can be traced to:

• Lack of familiarity. It’s still a new program, so many businesses are just now learning how it works.
• A complex application process with detailed technical documentation requirements.
• Cultural caution among German businesses, especially SMEs, when engaging with new tax policy tools.

That said, larger German firms are jumping in quickly. Once the processes are clearer and more advisors specialize in it, SME adoption is expected to rise.

Tips for German firms and policy makers

If you’re a German company:

• Don’t wait to apply. Even if the process seems complex, the benefit can significantly reduce your net innovation cost.
• Build your internal documentation habits early. This will help with audit readiness.
• Use pilot applications. Many firms test the system with small claims first to build confidence.

If you’re a policymaker:

• Invest in training advisors and accountants. The more they know, the easier the process becomes for SMEs.
• Provide case studies and success stories to drive awareness.
• Consider simplifying paperwork requirements.

Germany has laid the foundation. Now it’s time to increase usage through outreach and process optimization.

6. Australia: Over 70% of eligible companies claim the R&D tax incentive

A popular program with wide reach

Australia’s R&D Tax Incentive is well known among its business community. With over 70% of eligible companies filing claims, it’s one of the more successfully adopted tax benefits in the Asia-Pacific region.

The reason? Australia has made consistent efforts to keep the program accessible, especially for small and medium-sized businesses.

Why the program sees strong uptake

Here’s why many Australian firms are on board:

• The credit is available to both profitable and loss-making companies.
• There’s a refundable option for companies with less than $20 million in annual turnover.
• AusIndustry and the ATO provide substantial guidance and support.

The system encourages tech startups and manufacturing firms alike to explore R&D tax credits as part of their financial strategy.

Best practices for claiming in Australia

For Australian businesses:

• Don’t underestimate what counts as R&D. Often, software development or process engineering qualifies.
• Time your claim preparation with your end-of-financial-year tax planning.
• Keep detailed records of activities, personnel involved, and expenditures.

The Australian Taxation Office encourages proactive documentation. Treat your R&D work like a project: milestones, personnel, and budget lines all neatly tracked.

Actionable insights for other countries

If your country is trying to boost R&D credit adoption, Australia offers several good examples:

• Make the credit refundable to support startups.
• Create co-branded guidance from both the tax office and innovation agency.
• Encourage transparency on what qualifies, so companies feel confident about eligibility.

Australia’s program proves that clarity, accessibility, and flexibility can drive participation—even among newer, smaller firms.

7. Japan: Around 65% of eligible large firms utilize the R&D tax incentive

A mature economy with room to grow

Japan has long been known as a global leader in innovation. With massive investments in electronics, automotive, and robotics R&D, it’s no surprise that many of Japan’s large firms make use of the country’s R&D tax incentives.

Currently, about 65% of eligible large companies are claiming the credit. While that’s significant, it’s still lower than other innovation-driven economies like the US or UK.

What’s holding back broader utilization?

Several factors explain the gap:

• Japan’s tax system is complex, with multiple layers of bureaucracy.
• Many firms rely on internal tax teams and may be cautious about making claims that require technical justification.
• There’s a cultural emphasis on conservative accounting practices, especially among legacy corporations.

Also, while Japan offers multiple types of R&D tax credits (including volume-based and incremental credits), many firms are unsure which best fits their activities.

Advice for Japanese businesses

If you’re a Japanese company, here are some smart ways to move forward:

• Work with a specialist. R&D tax professionals can clarify which scheme works best for your business model.
• Document continuously. Don’t wait until year-end. Maintain clear logs of experiments, technical uncertainties, and time allocations.
• Train your finance and technical teams to collaborate. One reason claims fail is misalignment between engineers and accountants.

The tax incentive is generous—up to 30% of R&D costs in some cases. That’s too valuable to leave unclaimed.

A call to action for policymakers

If Japan wants to lift that 65% utilization rate closer to 90%:

• Simplify the rules and application forms.
• Publish real-world examples of approved claims.
• Offer SMEs additional hand-holding, perhaps through local chambers or accelerators.

There’s huge opportunity here, especially for medium-sized companies still sitting on the sidelines.

8. South Korea: Utilization rate exceeds 85% among technology-oriented firms

A high-tech nation that takes full advantage

South Korea is a powerhouse in semiconductors, telecommunications, and digital infrastructure. Unsurprisingly, its tech companies are highly proactive when it comes to claiming R&D tax benefits.

With over 85% of eligible tech-driven firms utilizing the available incentives, South Korea stands out as a leader in R&D tax credit engagement.

What’s working in South Korea?

Several things contribute to this high usage rate:

• Strong coordination between government and industry groups.
• Targeted support for sectors that are research-heavy.
• Tiered benefits based on company size and industry focus.

In South Korea, R&D isn’t just encouraged—it’s baked into the national strategy. Companies understand that claiming the tax credit is part of staying competitive.

Key takeaways for businesses in Korea

If you’re operating in South Korea and not claiming:

• Check your eligibility based on your tech projects. You may qualify without realizing it.
• Seek government-provided advisory support. Many local offices offer free assistance.
• Keep documentation in both Korean and English if you collaborate with international partners—it helps streamline external audits.

Also, even companies outside traditional “tech” industries can qualify. If you’re improving logistics through software, that may count as eligible R&D.

What others can learn from Korea

Countries aiming to replicate South Korea’s success can take these actions:

• Focus incentives on key growth sectors.
• Make it easy for companies to calculate ROI from their claims.
• Include R&D tax credit education as part of startup accelerator programs.

Korea shows what happens when a country makes R&D incentives part of a broader innovation ecosystem.

9. China: More than 90% of firms in high-tech zones utilize R&D super-deduction policies

A powerful, zone-based incentive strategy

In China, the government uses R&D incentives not just to promote innovation, but also to build regional tech hubs. Through designated high-tech industrial development zones, companies can access a range of tax breaks—especially the R&D super-deduction, which allows up to 175% of qualifying expenses to be deducted.

In these zones, over 90% of eligible firms are using the benefit.

Why the uptake is so high

There are a few standout reasons:

• The super-deduction is aggressively promoted by local officials.
• Businesses in these zones often get pre-approval or streamlined processing.
• China’s top-down policy style ensures that local tax bureaus prioritize program success.

Unlike other countries where R&D tax credit programs might be seen as optional or burdensome, in China they are viewed as essential.

What Chinese companies should focus on

If you’re operating in a high-tech zone:

• Treat your R&D tax claim as part of your annual strategic planning.
• Assign a specific team or individual to manage the claim process.
• Document personnel involvement carefully—China’s system checks for accuracy in who does what.

Also, remember that even failure counts. If you spend resources trying to solve a technical problem, the outcome doesn’t have to be successful to be eligible.

Global lessons from China’s model

China’s success here offers strong examples for other economies:

• Use location-based incentives to concentrate innovation clusters.
• Offer super-deductions rather than simple credits—higher financial upside motivates firms.
• Train local government units to be proactive partners, not passive regulators.

By aligning fiscal policy with innovation policy and regional development, China creates a cycle where R&D investment naturally follows.

10. India: Utilization rate among eligible firms dropped from 80% to 55% after 2017 policy changes

A drop that slowed momentum

India once had one of the most generous R&D tax credit systems in Asia, offering a 200% super-deduction on qualified research expenditure. But after 2017, policy changes reduced this to 150%, and then to 100% by 2020. As a result, the number of businesses claiming the credit dropped significantly—from 80% to around 55%.

This is a cautionary tale of how reducing incentives can cool off corporate enthusiasm.

Why the drop happened

Several key reasons caused the decline:

• Lowered deduction percentages made the credit less attractive.
• Uncertainty about long-term policy direction discouraged planning.
• Complex paperwork and lack of clarity in eligible activities added to the friction.

In a country like India, where many tech startups are still in the early growth phase, predictable and substantial support matters.

What Indian businesses can still do

Even with reduced benefits, there’s still value in applying. Here’s how:

• Understand what qualifies. Even internal software development or data analytics may count.
• Use cost centers and clear payroll records to segment R&D work.
• Engage with tax consultants who specialize in Section 35(2AB) or related schemes.

If you’re eligible but not claiming, you’re missing out on potential savings that could fund your next innovation.

Advice for policymakers in India

To revive momentum:

• Reintroduce higher super-deductions for specific sectors like biotech or AI.
• Offer fast-track processing for startups and SMEs.
• Publish clear success stories to build awareness and confidence.

India has enormous potential. Aligning policy with industry needs can quickly reverse the decline in R&D tax credit uptake.

11. Brazil: Approx. 45% of firms eligible under Lei do Bem actually claim R&D tax incentives

A promising system underused by many

Brazil offers R&D tax incentives through the Lei do Bem program, which has been in place since 2005. Yet, despite its potential, only about 45% of eligible companies file claims.

The main issue isn’t the quality of the incentive—it’s awareness, understanding, and the ease of access.

Why many Brazilian firms hold back

The reasons are common among developing economies:

• Bureaucratic processes with inconsistent interpretations across tax offices.
• Low awareness among SMEs about what qualifies.
• Concerns about audits and retroactive penalties.

Many firms simply don’t want to risk it, even if they’re entitled.

Actionable steps for businesses in Brazil

If you’re eligible under Lei do Bem, here’s what to focus on:

• Build a documentation-first culture. Keep timelines, technical reports, and expense breakdowns.
• File conservatively at first to build confidence.
• Seek support from consultants who specialize in R&D claims for your sector.

Even if your claim is modest, starting the process builds internal capability for larger future filings.

What Brazil can do to increase adoption

Policymakers can improve the system by:

• Simplifying the claim process with an online portal.
• Creating safe-harbor rules to ease audit fears.
• Hosting workshops and webinars to teach businesses how to claim.

When under half the eligible firms are applying, there’s a lot of room for growth. Brazil’s challenge isn’t creating a better credit—it’s helping more companies believe they can safely use it.

12. Ireland: Utilization rate for the 25% R&D tax credit scheme exceeds 80% among multinational subsidiaries

A focused success story

Ireland has made itself a hub for multinational tech and pharmaceutical companies. These firms come for the low corporate tax rate—but they stay because of incentives like the 25% R&D tax credit.

More than 80% of multinational subsidiaries in Ireland make use of the scheme. That’s a high success rate, and it reflects both the strength of the incentive and the clarity of the process.

Why this works so well in Ireland

Several factors come together:

• Most MNCs already have structured finance teams and global advisors.
• The Irish Revenue Commissioners provide clear guidance and consistent treatment.
• Ireland’s tax law encourages companies to set up R&D centers locally.

Also, many large corporations are required by group policy to optimize every available tax benefit. That institutional pressure helps push utilization up.

What Irish SMEs should take away

While multinationals lead in usage, small and medium-sized firms often lag. Here’s what they can do:

• Take a page from the big firms—document your work, structure your claim, and treat R&D as an investment.
• Use Enterprise Ireland support services to help prepare and validate claims.
• Keep good payroll tracking. Time and effort records help justify R&D team activities.

There’s also a growing network of Irish tax advisory firms who work on a success-fee basis. That means no upfront cost until the claim is approved.

Lessons for other small economies

Ireland’s approach shows how smaller nations can compete globally:

• Offer a high, flat-rate credit with clear rules.
• Align innovation policy with foreign investment strategy.
• Make the claim process predictable and efficient.

It’s not about the size of the country—it’s about how well the policy is communicated and delivered.

13. Netherlands: Over 70% of R&D-performing firms claim WBSO R&D tax credit

A strong, efficient system built for consistency

The Netherlands offers the WBSO (Wet Bevordering Speur- en Ontwikkelingswerk), one of Europe’s most efficient R&D tax credit systems. With over 70% of R&D-performing firms making claims, it shows how good administration and ongoing support can drive high utilization.

Unlike systems where businesses must wait until tax season, WBSO lets companies offset payroll tax on a monthly basis. That makes it tangible and cash-flow friendly.

Why the WBSO works

There are a few major strengths:

• The benefit is applied directly against wage taxes, giving immediate relief.
• The application process is well-defined and digital.
• Even sole traders and startups are eligible.

The Dutch government also offers year-round application windows, so you’re not tied to a single deadline.

How Dutch companies can use WBSO effectively

If you’re in the Netherlands and not yet claiming:

• Focus on projects that involve technical uncertainty or experimentation.
• Keep daily logs of R&D activities to meet WBSO requirements.
• Start small. Apply for one project, learn the process, then expand.

Also, take advantage of Rijksdienst voor Ondernemend Nederland (RVO) resources. They provide real support—not just links to legislation.

Takeaways for other countries

The Netherlands gets it right with a few smart strategies:

• Offer payroll-based relief for fast access to benefits.
• Allow rolling applications for flexibility.
• Don’t limit the credit to large firms—make it inclusive.

The result is a thriving innovation ecosystem where even small engineering teams feel supported.

14. Sweden: R&D tax incentive utilization rate is about 60% across eligible firms

Good awareness, but room to improve

Sweden has long been a leader in innovation, especially in clean energy, digital services, and manufacturing. Its R&D tax credit isn’t as generous as some others, but it’s consistent and easy to apply for.

About 60% of eligible firms currently claim it—a healthy rate, but not yet best-in-class.

Why utilization is steady, not soaring

Several factors influence this:

• Sweden has a culture of public grants and direct R&D subsidies, so some firms rely on those instead.
• The R&D credit primarily reduces employer social security contributions, not income tax. Some companies find this less impactful.
• Not all sectors are equally informed, especially service-based SMEs.

Still, for tech and industrial firms, it’s become part of standard tax strategy.

How Swedish businesses can increase their benefit

If you’re eligible but not claiming:

• Review your staffing costs. This is where the benefit applies most.
• Maintain detailed work-hour records for R&D employees.
• Use case studies from organizations like Vinnova to validate your assumptions.

Also, if you receive grants, you can often still apply for the R&D tax relief on different expenses. Don’t assume you’re excluded.

Global insights from Sweden’s model

Other countries can learn from Sweden’s approach to simplicity:

• Focus on reducing employment taxes rather than income taxes—this helps early-stage firms most.
• Pair tax credits with strong public grant programs.
• Provide local language guidance and practical examples.

Sweden proves that you don’t need the most generous incentive to drive real usage—just a system people can trust.

15. Finland: Utilization rate under R&D tax credit pilot program reached nearly 65%

A young program off to a strong start

Finland launched a pilot R&D tax credit program in recent years, and despite its short history, the uptake has already reached 65% of eligible firms. That’s a strong early signal that Finnish businesses see value in the incentive.

What’s unique here is the experimental approach—Finland tested the credit, analyzed its impact, and iterated before scaling.

Why businesses responded quickly

Finnish companies embraced the credit for a few reasons:

• There was clear communication from the Ministry of Economic Affairs and Employment.
• Early-stage feedback loops helped improve the program in real-time.
• The scheme was built to complement existing public grants from Business Finland.

This meant that companies didn’t have to choose between grants and credits—they could benefit from both, depending on their project structure.

How to take full advantage in Finland

If you’re a business in Finland:

• Look at bundling—use tax credits and grants together for broader funding.
• Focus on cross-functional collaboration. Get finance, HR, and R&D leaders involved in claim preparation.
• Monitor updates. Since the program is evolving, staying current is key.

Also, if you’re in a regional cluster or innovation hub, take part in info sessions—many business groups offer them.

Broader takeaways from Finland’s pilot strategy

Finland’s success offers useful lessons:

• Pilot programs help governments test and improve before full rollout.
• Ongoing feedback from applicants strengthens participation.
• Pairing tax incentives with a grant ecosystem supports startups and mature firms alike.

By treating the R&D tax credit as a living policy, Finland has avoided the common pitfall of one-size-fits-all thinking.

16. Italy: Around 58% of qualifying companies apply for the R&D tax credit

A useful credit with missed potential

Italy offers an R&D tax credit that supports innovation across manufacturing, engineering, and digital sectors. The country has updated its policy several times to stay aligned with EU standards. Still, only about 58% of qualifying firms actually use it.

While that’s better than average, it shows there’s still a gap—particularly among smaller and mid-sized companies.

What’s limiting higher adoption?

There are several reasons:

• The tax credit rules have changed multiple times in recent years. That creates confusion.
• The application process involves complex documentation and requires third-party certification.
• Many businesses don’t realize that activities like process improvements or product prototyping can qualify.

In Italy, large companies with strong legal and tax departments tend to use the credit effectively. SMEs, on the other hand, often find the process intimidating.

What Italian businesses should do

If you’re eligible but not filing:

• Begin by identifying eligible costs—wages, raw materials used in testing, and outsourced research all count.
• Work with certified auditors early. It helps streamline documentation and avoid rework.
• Take advantage of regional support programs. Some areas offer workshops or consulting credits to help with R&D tax claims.

Don’t let complexity be a reason to opt out. The savings can significantly improve your investment capacity.

What other countries can learn

Italy’s experience shows:

• Policy changes, even if well-intentioned, can reduce trust and participation.
• Certification can improve claim quality—but should not be a barrier.
• Local chambers of commerce can help fill the awareness gap.

With clearer rules and more outreach, Italy’s utilization rate could easily jump past 70%.

17. Belgium: Over 75% of biotech and pharma companies claim the R&D tax credit

A niche success story

Belgium is quietly a global leader in biotech and pharmaceutical innovation. It has cultivated this strength with strong academic partnerships, generous tax incentives, and government-backed clusters.

More than 75% of companies in these industries actively use the R&D tax credit, making it one of the most sector-targeted success stories in Europe.

Why this group stands out

Here’s what works in Belgium:

• The R&D tax credit complements a broader “innovation income deduction,” allowing companies to reduce tax on future profits from IP.
• Sector-specific guidance helps firms in pharma and biotech understand exactly what qualifies.
• High R&D spending in this sector makes the benefit too valuable to ignore.

Belgium also offers partial payroll tax exemptions for researchers, creating immediate cash flow advantages.

What companies in Belgium should keep in mind

If you’re outside the biotech/pharma space and not claiming:

• You may still qualify if you develop software, new engineering methods, or even smart manufacturing tools.
• Consider combining tax credits with subsidies from Innoviris or VLAIO.
• Keep your technical team involved—engineers and scientists play a key role in claim preparation.

The R&D credit isn’t just about cutting taxes. It’s about building a culture where innovation is funded and rewarded.

Lessons for other countries

Belgium’s model shows that:

• Industry-specific guidance boosts utilization.
• Pairing tax credits with future profit incentives encourages long-term innovation.
• Payroll tax relief drives early-stage R&D hiring.

Belgium didn’t just offer an incentive—it built a whole environment that makes innovation financially smart.

18. Spain: Only about 40% of eligible firms utilize R&D tax benefits, due to complexity

A generous credit stuck behind red tape

Spain’s R&D tax credit is one of the most generous in the EU. Companies can receive up to 42% in deductions depending on the structure of their R&D activity. Yet despite this, only about 40% of eligible firms actually claim it.

The issue? Complexity.

Why uptake is low

Several problems contribute:

• The rules are detailed and often hard to interpret without legal support.
• Companies fear retrospective audits and penalties.
• Many firms simply don’t know the credit exists or believe it’s only for large corporations.

Even those who start the claim process sometimes abandon it halfway because of the bureaucratic hurdles.

How Spanish companies can push forward

If you’re eligible but hesitant:

• Consider working with a consultant who specializes in Spanish tax law and innovation claims. Many work on a contingency basis.
• Start small—identify one project and treat it as a trial run.
• Request pre-approval when possible. This reduces audit risk and builds internal confidence.

You don’t have to be a tech giant. Even small improvements in logistics or software functionality can qualify.

Policy advice for Spain

If Spain wants to raise utilization:

• Provide online calculators and claim templates to simplify the process.
• Increase awareness through industry associations and regional business networks.
• Reduce penalties for first-time errors to encourage more companies to try.

A generous incentive is only powerful if it’s accessible. Spain has the right tool—it just needs to make it easier to pick up and use.

19. Norway: SkatteFUNN R&D tax credit is utilized by more than 90% of registered R&D performers

One of the most efficient systems in Europe

Norway’s SkatteFUNN program is among the most widely used R&D tax credits in the world. With more than 90% of registered R&D-performing firms filing claims, it stands out for its simplicity, accessibility, and reliability.

The name “SkatteFUNN” roughly translates to “Tax Find,” and the program truly lives up to its promise of helping businesses recover innovation-related costs.

Why Norway gets it right

Several things contribute to SkatteFUNN’s outstanding success:

• Open to all companies regardless of size or profitability.
• Straightforward application process, handled through an online portal.
• Pre-approval of projects through the Research Council of Norway, reducing audit risk.

The system was designed with users in mind, and it shows. Whether you’re a startup or a multinational, the steps are clear and the return is tangible.

How Norwegian businesses can maximize their claims

Even with high adoption, some companies still under-claim or miss out on eligible expenses. Here’s what to do:

• Align project planning with SkatteFUNN timelines. Pre-approval is required before the project year ends.
• Be specific in your project description. The clearer your technical challenges, the smoother the process.
• Use the official template provided by the Research Council—don’t reinvent the wheel.

SkatteFUNN allows companies to deduct up to 20% of R&D costs, and the benefit is available in cash for non-profitable companies. That’s a huge boost to liquidity.

What others can learn from Norway

Norway’s model offers several key takeaways:

• Pre-approval builds trust and reduces risk for businesses.
• Simplified online systems increase accessibility.
• Public-private collaboration ensures that businesses get support at every step.

SkatteFUNN proves that when a government treats businesses as partners, not suspects, utilization skyrockets.

20. New Zealand: R&D tax incentive uptake reached 60% after its 2019 introduction

A new entrant gaining momentum

New Zealand introduced its modern R&D tax incentive program in 2019. In just a few years, it has already achieved a solid 60% uptake rate among eligible firms—an impressive milestone for a new system.

The credit offers a 15% deduction on eligible R&D expenditure and is aimed at boosting investment across tech, agriculture, health, and manufacturing sectors.

What’s driving early adoption

Here’s why the program is seeing good traction:

• Inland Revenue and Callaghan Innovation partnered to provide support and education.
• The program is designed with flexibility, allowing even pre-revenue startups to participate.
• Clear eligibility guidelines make it easier to navigate than traditional grant programs.

Plus, there’s a growing innovation culture in New Zealand that aligns with the spirit of the tax incentive.

Tips for New Zealand firms

If you’re eligible but not yet claiming:

• Review your project documentation—particularly payroll and contractor records.
• Register projects early in the financial year to meet compliance requirements.
• If you’re unsure, submit a General Approval Application. It’s a safety net and helps clarify eligibility.

Many companies don’t realize that software development, algorithm research, and product engineering often qualify as R&D.

How New Zealand can keep the momentum

To push utilization even higher:

• Consider increasing the credit rate or adding a refundable component for smaller firms.
• Provide industry-specific examples to help companies self-assess faster.
• Offer more real-time claim tracking through the government portal.

New Zealand’s startup and innovation community is growing fast. Making the R&D credit easier to access can accelerate that even further.

21. Austria: About 75% of R&D-intensive firms utilize the 14% premium

A premium model with high appeal

Austria’s “Forschungsprämie” offers a 14% premium on eligible R&D expenditure. It’s a cash payment, not just a deduction—making it particularly attractive for firms that need liquidity.

With around 75% of R&D-intensive companies claiming the benefit, Austria demonstrates how a well-designed incentive can become a staple of business strategy.

Why Austria’s system works

Here’s what makes it successful:

• The benefit is not dependent on profitability—everyone qualifies.
• The process is centralized through the Austrian Research Promotion Agency (FFG), which provides expert reviews.
• The submission can be made after the end of the fiscal year, giving companies time to prepare.

Even better, the system has remained stable over time. That consistency builds trust among business owners and CFOs.

How Austrian companies can strengthen their claims

To get the most out of the Forschungsprämie:

• Ensure you maintain detailed technical documentation. The FFG review is thorough and based on project merit.
• Separate basic research from applied research in your project planning—it helps avoid confusion.
• Work closely with your tax advisor early in the project cycle.

Many Austrian firms also combine this premium with EU grants or Horizon Europe programs for even bigger benefits.

What others can learn from Austria

Austria’s R&D tax system is a strong example of:

• How direct cash payments encourage participation.
• Why expert validation (like FFG) can improve claim quality.
• The value of predictability—when businesses know the rules won’t suddenly change, they plan better.

Austria proves that clarity, credibility, and cash create a winning incentive mix.

22. Switzerland: Estimated 65% of eligible firms take advantage of cantonal-level R&D tax incentives

A decentralized but effective system

Switzerland does not have a centralized national R&D tax credit system like many other countries. Instead, incentives are offered at the cantonal level—meaning each region can set its own rules and benefits. Despite this decentralized setup, about 65% of eligible companies are utilizing these tax incentives.

That’s a strong result, considering the complexity of having different schemes depending on location.

Why companies in Switzerland are participating

Several factors encourage uptake:

• High awareness among multinational firms with established tax planning teams.
• Cantonal tax authorities often provide personalized guidance.
• Switzerland’s focus on high-value industries like pharmaceuticals, engineering, and precision manufacturing makes R&D investment a priority.

Also, many cantons allow a super deduction on qualifying R&D expenses, which can reduce the tax base significantly.

What Swiss companies should do

If you operate in Switzerland and haven’t yet explored R&D incentives:

• Begin by checking your local canton’s rules—rates and eligibility can vary.
• Talk to your cantonal tax office. They often offer one-on-one support.
• Keep strong documentation of employee time, third-party research contracts, and patents filed.

Because many Swiss firms conduct R&D in multiple cantons or even countries, coordination across finance teams is essential.

What others can learn from Switzerland

While decentralization can seem chaotic, Switzerland proves it can work if:

• Local tax offices are empowered and responsive.
• Rules are clear, and benefits are substantial enough to drive participation.
• High-value sectors are prioritized.

Switzerland’s model reminds us that flexibility and local autonomy can still lead to strong nationwide outcomes.

23. Portugal: About 55% of qualifying companies apply for SIFIDE R&D tax incentives

A valuable credit still climbing in usage

Portugal offers the SIFIDE (Sistema de Incentivos Fiscais em Investigação e Desenvolvimento Empresarial), a program that allows companies to deduct up to 82.5% of eligible R&D expenditures.

Yet despite this very generous structure, only around 55% of eligible businesses are currently using it. That suggests there’s still untapped potential—especially among smaller firms and those outside Lisbon and Porto.

Why the adoption isn’t higher

Some of the key challenges include:

• Low awareness among early-stage startups and traditional businesses.
• Complexity in categorizing and reporting eligible costs.
• Concerns about audit risk and misclassification of activities.

Additionally, while the program is generous, it often requires expert interpretation to navigate effectively.

How Portuguese firms can improve utilization

If you’re a business in Portugal and you think you might qualify:

• Don’t assume your activity is too minor. Even simple software development or product testing can qualify.
• Hire an R&D advisor to audit your activities—many offer free first consultations.
• Apply through IAPMEI or the Portuguese Tax Authority’s channels, which now include digital platforms for easier submissions.

You should also prepare early in the financial year, not just during tax season. That way, you can track costs more accurately.

Insights for other nations

Portugal shows that even very generous programs can underperform if:

• Companies aren’t aware or educated about their eligibility.
• Claims are hard to prepare without external help.
• Outreach is concentrated in urban hubs and doesn’t reach rural innovators.

With improved communication and simplification, Portugal could easily raise participation past 70%.

24. Czech Republic: Utilization rate is around 35% due to audit concerns

A promising system hindered by fear

The Czech Republic introduced an R&D tax deduction scheme that offers up to 100% additional deduction on eligible R&D costs. In theory, this should make it one of the most appealing incentives in Central Europe.

But in practice, only around 35% of eligible firms use it. The reason? Fear of audits.

Why companies are cautious

There are a few major barriers:

• Businesses worry that tax authorities may retroactively reject claims, leading to penalties.
• The eligibility criteria are interpreted differently by various tax officials.
• Many SMEs lack the confidence or resources to prepare defensible claims.

Because of this uncertainty, companies that could benefit often avoid applying altogether.

What Czech firms can do to navigate the process

If you’re operating in the Czech Republic:

• Focus on building an airtight documentation process. Track all R&D work in real-time, not retroactively.
• Use language that aligns closely with tax authority definitions—this reduces the chance of misinterpretation.
• Start small. File for one project, build your claim process, and expand with experience.

Working with tax advisors who know how to structure R&D reports in the Czech context can significantly reduce perceived risk.

Advice for improving the system

To lift utilization, the Czech government can:

• Offer pre-approval options or project registration systems.
• Publish successful anonymized claims as examples for others.
• Set up training for both taxpayers and tax inspectors to ensure consistency.

The Czech Republic has a golden opportunity here. If they reduce the fear of audits, their R&D ecosystem could grow dramatically.

25. Poland: Around 50% of tech startups utilize R&D tax relief

An emerging ecosystem making steady progress

Poland’s innovation ecosystem has grown rapidly over the last decade, especially in software development, AI, and fintech. The country introduced R&D tax relief to support this shift—and now, about 50% of tech startups are taking advantage of it.

That’s a strong start, especially in a market still building its R&D infrastructure. But there’s clearly more room to grow.

Why only half of tech startups are claiming

There are several reasons for the 50% ceiling:

• Many founders are unaware that routine development and testing can qualify.
• The definition of “R&D” is still seen as too academic or science-heavy.
• Early-stage startups sometimes assume you need revenue or profit to apply—which isn’t true.

In reality, the Polish R&D tax relief allows pre-revenue firms to claim a tax deduction on eligible R&D costs, including payroll, materials, and external consulting.

How Polish startups can make the most of it

If you’re a founder in Poland:

• Don’t overthink the definition of R&D. If you’re solving technical problems, you may qualify.
• Keep logs of coding sprints, beta tests, or technical designs. These form the basis of your claim.
• Talk to your accountant early in the year to structure expenses properly.

The process has improved significantly over the years, and government portals now offer more clarity and case studies than before.

Opportunities for improvement

To lift utilization rates, Poland could:

• Provide fast-track filing options for tech startups under 5 years old.
• Introduce refundable credits to make benefits more useful for cash-tight founders.
• Offer guidance that speaks the language of startups—not just tax professionals.

Poland’s R&D tax relief system is on the right track. With better outreach and a startup-friendly tone, that 50% could quickly rise.

26. Russia: Less than 30% of eligible firms utilize R&D tax incentives

Low utilization despite strong scientific talent

Russia has long been known for its deep base of technical and engineering expertise. It invests heavily in defense, aerospace, and scientific research. Yet, when it comes to corporate R&D tax incentives, the private sector is underperforming—fewer than 30% of eligible firms file claims.

This shows a clear disconnect between national research output and private sector tax strategy.

What’s going wrong?

Several factors contribute to the low utilization:

• Many businesses find the application process overly bureaucratic.
• Eligibility rules are unclear and inconsistently applied across regions.
• There’s low trust in the tax administration process, particularly among SMEs.

In many cases, companies choose not to file because they fear retroactive scrutiny or uncertainty about how their R&D will be evaluated.

How Russian firms can better approach R&D incentives

If you’re a Russian business:

• Focus on your documentation quality—who, what, when, and how are the core questions to answer.
• Seek legal and tax support early in your planning cycle, not just during filing.
• Consider starting with pilot claims to test the system and build internal confidence.

Even in a risk-averse environment, showing compliance through proper tracking can make a claim much safer.

How the system can evolve

For Russia to improve utilization:

• There needs to be more consistency in the interpretation of eligibility rules.
• Government bodies should simplify forms and provide digital submission tools.
• Public-private dialogues could help build trust and transparency around the incentive process.

Russia has the scientific capacity. If it can match that with a business-friendly R&D credit system, participation will grow rapidly.

27. Singapore: Over 85% of eligible firms claim the R&D tax deduction or PIC scheme

A high-adoption model in a compact economy

Singapore is a global benchmark for innovation incentives. With over 85% of eligible firms making use of the R&D tax deduction or its predecessor, the PIC (Productivity and Innovation Credit) scheme, it’s clear the system is working.

Singapore has achieved this by making the process clear, rewarding, and accessible—even for smaller businesses and first-time claimants.

What’s driving such high usage?

Several smart decisions have helped:

• The credit is available to all businesses regardless of profit.
• A wide range of activities count as R&D, including process development and digital transformation.
• The government heavily promotes the scheme through workshops, business associations, and SME portals.

There’s also a high level of tax compliance and professionalism across Singapore’s business ecosystem, which makes the system run smoothly.

What Singapore businesses should do to stay ahead

If you’re already claiming:

• Revisit your R&D strategy annually to ensure you’re maximizing what qualifies.
• Maintain tight logs—especially if you’re working with overseas partners.
• Consider combining the R&D credit with other schemes like Enterprise Development Grant (EDG) for even greater impact.

If you’re not yet claiming, take the plunge. The process is user-friendly, and the upside is substantial.

Lessons for others

Singapore’s experience shows that:

• A proactive government outreach strategy works—especially for SMEs.
• Clarity and simplicity are more important than high percentages.
• Integrating R&D incentives into a broader productivity strategy builds long-term business resilience.

Singapore didn’t just hand out tax breaks. It built a whole ecosystem that rewards calculated risk and structured experimentation.

28. Malaysia: R&D tax incentive utilization rate is around 40%

A generous but underused scheme

Malaysia has long offered R&D tax incentives aimed at encouraging local innovation in industries such as electronics, manufacturing, and biotech. However, despite the availability of double tax deductions and cash-based support in some cases, only around 40% of eligible firms currently take advantage of them.

This is a missed opportunity—especially as Malaysia pushes to become a hub for high-tech investment in Southeast Asia.

Why is utilization so low?

Several barriers stand out:

• Limited awareness, especially among SMEs and non-exporting firms.
• A perception that R&D must be high-end or lab-based to qualify.
• Complexity and delays in obtaining pre-approval from government agencies.

Many businesses also find the approval process opaque, which discourages participation even when incentives are financially attractive.

How Malaysian businesses can turn this around

If you’re running a business in Malaysia and doing anything remotely innovative:

• Get familiar with MIDA (Malaysian Investment Development Authority) and MITI—they oversee much of the R&D incentive landscape.
• Start documenting technical problem-solving in your operations. Even small process improvements may qualify.
• Consider working with local tax consultants who understand the latest policy updates—especially around R&D certification.

Don’t assume you’re too small or too early-stage. The system is designed to support companies at all levels of growth.

What the government can do better

Malaysia can improve R&D utilization by:

• Streamlining the application and approval process.
• Publishing plain-language guidance and sector-specific examples.
• Offering workshops and digital tools to demystify the incentives.

If businesses are empowered with clear paths to claim what they’re eligible for, Malaysia’s innovation performance will rise accordingly.

29. South Africa: Estimated 50% utilization rate of the 150% R&D deduction

A generous incentive with mixed results

South Africa’s Section 11D R&D tax incentive allows for a 150% deduction on qualifying R&D expenditure. On paper, this is one of the most attractive schemes globally. Yet, utilization sits at an estimated 50%, with many businesses hesitant to claim.

The gap between potential and actual use is significant and points to deeper issues in implementation.

Why the uptake isn’t higher

Despite being around for years, several challenges remain:

• Long delays in getting approval from the Department of Science and Innovation.
• Confusion about which expenses qualify, especially in software and IT.
• The requirement for pre-approval can slow down the process and deter companies.

Some businesses simply don’t see the credit as worth the administrative burden—especially small ones with limited internal capacity.

What South African firms can do

If you’re eligible:

• Apply early. Pre-approval is a bottleneck, so get in line as soon as a project starts.
• Create a habit of keeping technical and financial records in sync—this makes it easier to justify your claims.
• Educate your finance and R&D teams on how to frame technical uncertainties, which is a core eligibility criterion.

You may also want to consider external assistance for structuring and submitting your application. Many local consulting firms now specialize in this area.

How South Africa can improve its impact

To drive participation:

• Reduce approval times and make the pre-approval process optional for smaller claims.
• Allow retrospective claims for new businesses in their first two years.
• Increase outreach to industries beyond manufacturing, like fintech, agriculture tech, and clean energy.

The 150% deduction is powerful. With more accessible processes, South Africa could become a much stronger innovation hub on the continent.

30. Israel: Approx. 80% of eligible startups and tech companies utilize the R&D support and tax reliefs

A startup nation that truly backs innovation

Israel, often called the “Startup Nation,” lives up to its name when it comes to R&D support. With approximately 80% of eligible startups and tech firms claiming tax reliefs or government-backed R&D support, Israel ranks among the most innovation-friendly countries in the world.

This high utilization rate is no accident—it’s the result of strategic planning and a deep culture of entrepreneurial support.

Why Israel excels

Here’s what sets Israel apart:

• The Israeli Innovation Authority (IIA) plays a proactive role in identifying, funding, and supporting early-stage R&D.
• Many tax incentives are paired with grants, loans, and direct funding—creating a powerful combo.
• The government provides clear guidance and works closely with companies through accelerators and incubators.

Israel doesn’t just reward innovation; it scaffolds it.

What Israeli startups should keep doing

To stay on track or go further:

• Integrate R&D tracking systems early—automate time-tracking and budgeting for R&D teams.
• Combine IIA grants with tax reliefs to reduce both risk and cost.
• Engage with your local innovation hub or accelerator—they’re often tied directly into the funding ecosystem.

Many companies in Israel are also expanding to global markets and can benefit from bilateral R&D agreements with other nations. Keep an eye out for cross-border funding opportunities.

Global takeaways from Israel’s strategy

Other countries can learn a lot here:

• Pair tax incentives with grant funding to reduce the cash flow burden on startups.
• Build strong institutions like the IIA that provide long-term, hands-on support.
• Treat innovation funding as a national strategy—not just a tax policy.

Israel proves that with alignment, accessibility, and ambition, a small country can become a global innovation powerhouse.

Conclusion:

R&D tax credits are more than a line on your tax return—they’re a strategic tool. Across these 30 countries, we’ve seen how different systems work, where they struggle, and what you can learn.