German chemical industry calls for R&D tax break

06 August 2008 17:22  [Source: ICIS news]

TORONTO (ICIS news)--German chemical industry association Verband der Chemischen Industrie (VCI) on Wednesday called on the government to grant an additional tax break for research and development (R&D) to strengthen the industry’s competitiveness.

 

Firms should be allowed to deduct 10% of their R&D expenses from their tax payable, VCI said.

 

In case of a loss the firms would be entitled to a tax credit.

 

The incentive would come on top of the existing treatment of R&D spending as a business expense, VCI said.

 

The measure would help make Germany’s chemicals producers more competitive and promote research and employment on sites within the country, said Alfred Oberholz, who heads VCI’s R&D committee.

 

For 2008, VCI expected Germany’s chemical industry to invest €9.68bn ($15bn) in R&D, he said.

 

The industry’s R&D spending had been rising by an average 5%/year since 1995, Oberholz said.

 

Currently, about one in ten jobs was in R&D and Germany's chemical industry ranked 3rd in R&D investments after the US and Japan, he said.

 

Oberholz also called for more government investment in education.

 

In terms of gross national product, Germany was spending less on education today than in 1995, he said.

 

($1 = €0.65)

 

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By: Stefan Baumgarten
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