Tax breaks to help pump R&D
Helsinki – The Finnish government has announced plans to introduce tax incentives for companies with high research and development activities. At the end of June, a working group from the Ministry of Employment and Economy (MEE) published the proposal. “We need new solutions in order to bring more companies into the sphere of innovation activities whose development in terms of productivity and competitiveness is key to the national economy,” says Minister of Economic Affairs Mauri Pekkarinen. He further emphasised that the tax incentive scheme “would enhance Finland as an innovation environment.”
The Finnish initiative is in step with similar efforts made in other European countries like Sweden and Germany. The tax incentive would supplement Finland’s current system based on the direct funding of research, development and innovation activities. The working group has recommended that the government make a decision on a pilot basis at the beginning of 2010. The tax incentive would be directed primarily at small and medium-sized enterprises, and would be based on R&D labour costs. “The majority of OECD countries use tax incentives to supplement the direct funding of R&D activities. It would seem logical to introduce tax incentives on a trial basis in Finland too,” says Veli-Pekka Saarnivaara, Director General of Tekes, the Finnish Funding Agency for Technology and Innovation.