Tuesday, 9 April 2019

Questions (160)

Thomas P. Broughan


160. Deputy Thomas P. Broughan asked the Minister for Finance the estimated amount that could be raised from eliminating the refundable nature of the unused element of the research and development tax credit for corporations; and if he will make a statement on the matter. [16457/19]

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Written answers (Question to Finance)

I am advised by Revenue that information in respect of the annual cost of the Research and Development (R&D) tax credit is available for all years up to 2016 at link, https://www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/r-and-d-tax-credits.aspx.

The publication includes information on the cost of payable tax credits for each of these years. Information in respect of 2017 should be available later in 2019.

Where a company has insufficient Corporation Tax against which to claim the R&D tax credit in a given accounting period, the tax credit may be credited against the Corporation Tax for the preceding period, may be carried forward indefinitely or, if the company is a member of a group, allocated to other group members. The R&D credit can also be claimed by the company as a payable credit. Where a company has offset the credit against the Corporation Tax of the current and preceding accounting periods and an excess amount still remains, the company may make a claim to have the amount of that excess paid to it by Revenue in three instalments over a period of 33 months.

It is not possible to accurately predict the yield from eliminating the payable element of the R&D credit. Sums in respect of the credit are generally set off against Corporation Tax in the first instance and are only carried forward as a payable credit where there is insufficient tax liability in a year to absorb the full amount. The future cost of the payable element is therefore dependent on both the profitability of claimant companies as well as their level of qualifying R&D activity.