The project aims at analysing three issues related to the definition of research and development (R&D) with respect to a planned R&D tax incentive in Germany:

• Evaluating the practicality of the R&D definition of the Frascati Manual for the specific situation of R&D in the mechanical engineering industry;
• International examples of how authorities deal with the R&D definition of the Frascati Manual in national R&D tax incentive schemes;
• Assessing the likely impact of the planned R&D tax incentive in Germany for the mechanical engineering industry.

The analyses are intended to contribute to a list of criteria how the mechanical engineering industry can define R&D in a way that is consistent with the Frascati Manual and at the same time reflects the practice of R&D in the industry.