This project investigates the impact of taxation on corporate innovation in the context of the knowledge economy. In particular, the proposed research will investigate how taxes affect the incentives of firms to in-vest in R&D activities and to create intellectual property, and how taxes affect firm productivity. The work-packages combine theoretical and micro-econometric approaches which take into account the characteris-tics of tax systems. All work-packages contribute to derive substantive policy advice to national and EU poli-tics with respect to tax strategies fostering innovation and competitiveness. The research programme "Strengthening Efficiency and Competitiveness in the European Knowledge Economies (SEEK)" is funded by the State of Baden-Württemberg.