| Abstract [eng] |
This study investigates the Corporate Income Tax incentives for R&D: enhanced allowances of expenditures, accelerated depreciation and reduced 5 percent tax rate on the part of taxable R&D profit. In the first part of the study R&D tax incentives are introduced as the effective instrument in stimulating R&D investment in the EU, while analysing the reasons and significance of the R&D tax incentives. The first part also analyses the best practices of other countries, while highlighting the problems that exist in Lithuania and seeking to find the best solutions to solve these problems. The second part is concentrated on the complicated concept of R&D, the criteria applied to R&D tax incentive, the detachment of R&D and related activities. Finally, the third and the last part of this study investigates the legal regulation, peculiarities and problematic aspects of R&D tax incentive in Lithuania. The results of this research show that Lithuanian R&D tax incentives are not popular for many reasons. However, the improvement of existing regulations could help to increase the attractiveness of R&D tax incentives. The analysis of the existing R&D tax incentives reveals that there are number of requirements that must be met in order to apply R&D tax incentives, besides that, entity‘s activities must be considered as R&D. Finally, the specificity of R&D that R&D activities are complementary to the main activity of the entity, requires a clear distinction between them. According to that, very detailed documentation is required to be prepared and detailed analysis of particular R&D tax incentive is required in order to justify the reasonable application of it. |
