While automotive companies—and consumers—tend to view R&D as the lifeblood of the industry, tax authorities see the tools, raw materials and technical services that car companies import or acquire in the course of creating new products as revenue-generating opportunities. They hold a similar view of the royalty income such R&D activities may create.
Indirect and direct taxes applied to intellectual property activities can vary significantly from country to country – and even within national borders, according to local tax regimes and holidays that may serve to reduce certain tax burdens.
Specifically, this study looks at 16 countries and their:
- Average tax burden on importation of goods and equipment
- Average tax burden on importation of goods and equipment, net of VAT credits
- Average tax burden on import of technical services (tax burden as a percentage of the amount invoiced for the services)
- Average tax burden on royalty revenues
Given that automakers and suppliers spend an average of 4% of revenue on R&D, and the impact of applicable direct and indirect taxes, it is essential for companies to study the tax ramifications before developing or expanding R&D operations. This study provides a means for doing so.
Contact Name
Harry J Wisniewski
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+1 313 394-6366
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