Commercial Surveys

Commercial Surveys

A Diagnostic Analysis of the Implementation of the R&D Tax Credit under the Knowledge-Based Production Leap Law

Document Type : Original Article

Authors
Parisa Alizadeh 1
Seyed Reza Mirzaei Douraki 2
Fatemeh Eskandari 3
1 Assistant Professor, Department of Science, Technology and Innovation Financing and Economics, National Research Institute for Science Policy
2 Corresponding author: PhD student in Innovation Studies and Strategic Technology Development, National Research Institute for Science Policy
3 PhD student in Science and Technology Policy, Tarbiat Modares University
10.22034/bs.2026.2088098.3231
Abstract
The research and development (R&D) tax credit policy allows firms to deduct part of their R&D expenditures from income tax or carry unused credits forward to subsequent years. Introduced under the Knowledge-Based Production Leap Law, this policy aims to stimulate business investment in R&D. However, its actual implementation has fallen far short of expectations. This study therefore provides a diagnostic analysis of the implementation of the R&D tax credit policy in Iran to identify the factors underlying its limited effectiveness. Using an exploratory qualitative approach and a case study design, data were collected through 23 semi-structured interviews with policymakers and implementers, R&D assessment experts, and managers of eligible firms. The data were analyzed using content analysis with MAXQDA software. The findings identify five major clusters of implementation challenges: shortcomings in policy design and coverage; weak institutional coordination and a lack of mutual trust among key implementing actors; complexity, ambiguity, and instability in implementation procedures and the supporting electronic system; limited policy, analytical, and administrative capacity of responsible institutions; and the heterogeneity of firms and R&D activities, which has resulted in unequal access for small and start-up firms. The findings illustrate a design–implementation gap, suggesting that without institutional trust, effective inter-sectoral coordination, and targeted investment in implementation capacity, even well-designed policy instruments are unlikely to generate substantial increases in business R&D investment.
Keywords
R&‌‌‌D Tax Credit
Business Sector
Knowledge-Based Production Leap Law
R&‌‌‌D Additionality
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Commercial Surveys
Volume 23, Issue 135 - Serial Number 135
January and February 2026
Pages 1-32

  • Receive Date 05 May 2026
  • Revise Date 11 June 2026
  • Accept Date 22 June 2026