[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.