Abstract: “The effective implementation of fiscal instruments in innovation policy, can help countries to achieve sustained economic growth and improve their competitiveness. In case of Poland, the lack of fiscal incentives which could increase business sector’s propensity to invest in R&D and encourage greater cooperation in the area of research and innovation, appears to be the serious hindrance in narrowing the technology gap in comparison to the most innovative economies. The paper analyzes the most popular types of R&D tax incentives, taking into account their effectiveness, such as tax credits, enhanced allowances, accelerated depreciation or preferential tax rates. The results of conducted analysis reveal that the existing fiscal incentives in Poland encourage only imitation or are directed to the selected entities. The Polish model of R&D financing is based mainly on state subsidies and structural funds, however following the solutions of more experienced countries, there is an urgent nee”

Keywords: tax incentives, R&D, innovation