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For Oral Answer on : 28/04/2022
Question Number(s): 31 Question Reference(s): 21412/22
Department: Finance
Asked by: David Stanton T.D.
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QUESTION
To ask the Minister for Finance his Department’s plans, if any, to encourage greater take up of the R&D tax credit by small domestic companies; and if he will make a statement on the matter.
REPLY
The Research and Development (R&D) tax credit allows companies to claim a 25% tax credit in respect of expenditure incurred on qualifying R&D activities.
The Programme for Government – “Our Shared Future” – recognises the importance of research, development and innovation as these are recurring theme across a number of the mission aims. Specifically in relation to Small Business Taxes, there is a commitment to continue to encourage greater take-up of the R&D Tax Credit by small domestic companies, by building on recent changes and examining issues with respect to preapproval procedures and reduced record keeping requirements.
A review of the R&D tax credit is taking place during 2022, alongside an evaluation of the Knowledge Development Box (KDB). As part of the review, my officials published a public consultation relating to the operation of both reliefs. The consultation documents includes questions on the interaction by small and medium enterprises (SMEs) with the R&D tax credit. The purpose of this public consultation is to consider the current challenges facing firms who are active in the R&D and IP space, as well as the implications of recent domestic and international tax reforms for these two reliefs. All input will be considered in the context of this year’s Budget and Finance Bill. This consultation will run until 30 May 2022 and the consultation paper is available on www.gov.ie.
The Deputy may also be interested in Revenue’s published information in respect of the research and development tax credit, which is available at: https://www.revenue.ie/en/corporate/documents/statistics/tax-expenditures/r-and-d-tax-credit-statistics.pdf. Updated statistics in respect of the 2020 cost and claimants figures are expected to be published by Revenue this quarter.
