Tax Competitiveness and Diversity in Tax Incentives for Innovation: Categorization of EU Countries
Eleonóra DEMEOVÁ – Ján HUŇADY
https://doi.org/10.18267/pr.2026.vol.2587.8
Abstract: Tax competitiveness is one of the factors shaping a country’s business climate to support innovation. The aim of this research is to evaluate tax competitiveness across EU countries, with a focus on tax support for innovation. Based on the identified measurable indicators from the International Tax Competitiveness Index, we classify countries into relatively homogeneous groups. The results were obtained using PCA and clustering. We identified six main clusters of countries with similar levels of tax burden, system complexity, and the intensity of use of tax incentives for research and development (R&D). Slovakia was included in the second cluster, which comprises countries with below-average tax burdens and, at the same time, relatively high tax breaks for research and development. The Czech Republic was included in a cluster together with Estonia and Latvia. These are countries with the lowest tax burdens. However, these countries do not use patent boxes. The results indicate a relatively significant diversity among EU countries.
Keywords: tax competitiveness, tax incentives, innovation support, research and development incentives, tax policy.
JEL Classification codes: H25, O38, O31
Fulltext: PDF
Published by: Prague University of Economics and Business, Oeconomica Publishing House
Year of publication: 2026
Online publication date: 20 May 2026
Copyright: Authors of the papers
ISBN 978-80-245-2587-7
ISSN 2453-6113
Pages 101-111