TAX INCENTIVE SCHEMES FOR R&D – A SOLUTION FOR THE ROMANIAN ECONOMY

This study aims to examine what are the most efficient designs for a tax incentive scheme for Romania. We also investigated the relationship between the level of economic development and the R&D intensity in the European Union States. Our results suggest that the policy making authorities should focus on facilitating private investments in R&D, and especially on specific fiscal incentive schemes for SMEs. These schemes are important and efficient because they, by supporting enterprise’s real needs, are not distorting the markets, thus facilitating and supporting R&D projects with very specific needs, with a more appropriate timing of the projects. After a complex description and analysis of ten examples of good practice in EU, we found out that an efficient scheme for R&D activities in Romania should focus on R&D expenses, containing both capital and current expenses, a benefit in form of an additional deduction for eligible R&D expenses, a flat rate system and size differentiation.