[syntaxing]

I haven’t worked in a revenue positive company for over 5 years. But prior to that, once a year, someone would sit at my desk asking for anything I did was “new” and how so. In the states, any “research” work is a tax write off. I wouldn’t be surprised if Mercedes is using this as well.

[wongarsu]

It's not just taxes, it's also important for your balance sheet. Which I imagine is important to a publicly listed company like Mercedes. If you pay someone $100.000 and they don't create anything, that's money you lost. But if you spend $100.000 on research or development (two subtly different things) there is the expectation that they created at least $100.000 of value that will be realized in future years. You didn't lose money, you converted it from cash to intangible assets, simply a different line on your balance sheet.

The tax benefits more or less derive from that, along with the general consensus that we should encourage companies to invest into the future.

[bko]

I don’t understand the tax implications. Employee salary is subtracted from gross earnings and not taxed. You have employment taxes but you have to pay those regardless. So how is an employee salary categorized as r&d a tax benefit?

[rich_sasha]

R&D expenditure often let's you write off more than 100% of the cost for tax purposes, to encourage it.

[hackernewds]

I have worked at a very ubiquitous large tech company and the file all data science team salaries as a tax write-off. because we are part of the r&d team, you might see yourself as being in the rnd team in your company HR management tool specifically for this reason

[MrSkelter]

I doubt that a German company is doing that. In addition spinning up a new car is a multi billion dollar enterprise and for 50 years Mercedes have released “the car of the future” in the shape of the new S class. Automotive journalists routinely call it the best car in the world and it’s where innovations start to trickle down from.

Other car companies do great things but it’s easy to see how Mercedes could be spending that much when you factor in that every car has to be completely new at least once a decade.

Chrysler built their biggest hit vehicle on obsolete mid-range Mercedes technology they were able to borrow.

[blackeyeblitzar]

Yes virtually all companies do this but some are very good (or aggressive) at this game. Classifying things as new research is easy to claim and hard to disprove. Think about it from the perspective of an auditor - they can’t do much more than check something off. Like there’s some vague project plan shared as evidence? Alright this checks out. Next company. The real problem is it’s big sophisticated incumbents who abuse this system. Young scrappy startups that are actually doing R&D often underutilize these tax breaks.

[petercooper]

Ah, the British tax authorities have a solution for this! They declare that R&D is "an advance in overall knowledge or capability in a field of science or technology" and that an independent expert has to agree with that. This means, of course, quite little is legitimate R&D and proving it is often more effort than it's worth. (It's unconnected that the UK contributes relatively little to major tech advancements nowadays compared to the size of its economy.. ;-))