Royalty tax credit is a phrase that refers to a reduction in taxes paid by companies or individuals who make payments for the use of patented intellectual property. Some synonyms for this phrase include patent tax credit, innovation tax credit, and intellectual property tax credit. These terms are often used interchangeably in the business world to refer to tax incentives that encourage companies to invest in research and development. Such investments ultimately lead to the creation of new products, processes or services that add value to the economy. Regardless of the terminology used, the goal of these tax credits is to stimulate innovation and reward companies that invest in the creation of valuable intellectual property.