This is the second edition of KPMG’s Americas (Canada, the US and Latin America) research and development (R&D) incentives guide. The country-specific information and summaries of R&D tax incentives for R&D expenditures in this guide aim to help you decide where to locate R&D programs.
The continued global economic downturn has many governments re-evaluating their R&D tax credits, looking for ways to encourage foreign companies to invest in their countries. Many of those incentives are for job creation. Companies, however, require strong stable economies and governments before investing their R&D dollars in a particular country.
The latest economic release from the Conference Board of Canada discusses the protracted economic crisis and potential for long-term growth for the regions of the world. In 2014, Latin America is projected to grow by 2.8 percent of gross domestic product (GDP). The United States is projected to grow by 3.0 percent. The International Monetary Fund argues for a growth rate of 3.0 percent for Latin America and the Caribbean (Brazil and Mexico at 2.3 and 3.0 percent respectively), 2.8 percent for the United States and 2.2 percent for Canada.
Battelle’s forecast for growth in global R&D is projected to be 3.6 percent or1.6 trillion US dollars (USD) in 2014.
The measure used to compare international expenditures is the gross domestic expenditure on R&D (GERD). This consists of the total expenditure (current and capital) on R&D carried out by all resident companies, research institutes, and university and government laboratories. GERD does not include funds spent outside the domestic economy (OECD). The current statistics available from the Organisation for Economic Co-operation and Development (OECD) are for 2012. The United States is still the dominant player with 2.9 percent GERD.