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In the US, R&D expenses can often be deducted when filing taxes. I’m sure large companies like Google would be taking advantage of those rules.
by orev 3y ago
In the US, R&D expenses can often be deducted when filing taxes. I’m sure large companies like Google would be taking advantage of those rules.
- ant6n 3y agoCan't all expenses be deducted when filing taxes? I mean, taxes are paid on profit, which is revenue minus expenses.
- mikeyouse 3y agoYeah the person you are replying to was imprecise - there's actually tax credits for R&D expense in the US rather than just tax deductions. https://www.plantemoran.com/explore-our-thinking/insight/2020/08/is-your-business-getting-the-rd-tax-credit-it-deserves https://www.plantemoran.com/explore-our-thinking/insight/202...
- jdross 3y agoStarting this year you need to amortize the R&D expenses over 5+ years, which is going to be brutal for startups. Losing a lot of money and you can't write off your engineers
- marcosdumay 3y agoNot to mention the thing about tax credits, but when people say "R&D expenses" they often include quite a lot of investments on their definition. In fact, it's arguable if anything in R&D qualifies as an expense at all.
- ant6n 3y agoOnly money spent that turns into an asset is investment. I’m not sure how it is in US, but in Germany, for example, not even registering a patent is an investment and does not imply the creation of an asset — only buying the patent creates the asset.