Dáil Éireann Debate, Tuesday - 11 March 2014
95. Deputy Róisín Shortall asked the Minister for Finance the number of claims received by the Revenue Commissioners in 2009, 2010, 2011, and 2012 for relief under section 291(a) of the Taxes Consolidation Act 1997; the gross cost of granting the relief in each of the above years; the estimated cost of the relief in 2013 and 2014; and if he will make a statement on the matter. [11901/14]
View answerSection 291A of the Taxes Consolidation Act 1997 was introduced in Finance Act 2009 and enables companies to claim capital allowances for expenditure incurred on the provision of intangible assets (e.g. patents, copyright, trademarks, know-how) for the purposes of a trade.
Allowances are based on the amount charged to the profit and loss account in respect of the amortisation or depreciation of the intangible asset. Alternatively, companies can opt for a write-down of expenditure over 15 years at a rate of 7% per year, with 2% in the final year.
Allowances may only be offset against income deriving from activities of managing, developing and exploiting intangible assets as part of a company's trade. It should also be noted that these capital allowances are ring-fenced for use against the income arising from the intangible asset on which the expenditure was incurred. This ensures that the capital allowances are only available in respect of income which would likely not otherwise arise. Also, for any accounting period, the aggregate amount of allowances, plus interest on any borrowings to fund the allowable expenditure, may not exceed 80% of trading income (before allowances and interest) of the relevant trade, with any excess carried forward for offset against trading income in subsequent accounting periods.
I am informed by the Revenue Commissioners that the estimated numbers of claims and gross cost of allowances under Section 291A claimed by companies on the corporation tax returns for the tax years 2009 to 2012 are as set out in the following table. It should be noted that the estimated tax cost shown below is the maximum tax cost associated with the claims in each tax year and takes no account of increased economic activity arising from the measure.
|
Tax Year |
Number of Claims |
Estimated Tax Cost |
|
2009 |
180 |
€1.2m |
|
2010 |
176 |
€20.3m |
|
2011 |
193 |
€76.2m |
|
2012 (Provisional) |
249 |
€108.0m |
The estimated cost of the relief in the tax years 2013 and 2014 are not yet available.
