I propose to take Questions Nos. 69 and 70 together.
The Research and Development (R&D) Tax Credit, as set out in section 766 of the Taxes Consolidation Act 1997, allows companies claim a 25% tax credit in respect of expenditure incurred on qualifying R&D activities. Companies may be eligible to claim the R&D tax credit in respect of some outsourced R&D activities and there are different restrictions which apply to outsourced activities depending on whether they are outsourced to a third party or to a university or higher education institute.
Where a company outsources some of its R&D activities to third-parties (who may carry out the R&D in Ireland or anywhere else in the world), the amount of expenditure on outsourcing in respect of which they may claim the R&D tax credit is restricted to the higher of €100,000 or 15% of the R&D expenditure incurred.
Where a company outsources some of its R&D activities to a university or higher education institute (who may be located in Ireland or in an EU or EEA State), the amount of expenditure on outsourcing in respect of which they may claim the R&D tax credit is restricted to the higher of €100,000 or 5% of the R&D expenditure incurred.
I am informed by Revenue that information in respect of the tax cost of the research and development tax credit is published on their website at https://www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/r-and-d-tax-credits.aspx.
It is not possible to separately identify the cost associated with services outsourced to third parties or to universities and higher education institutes. Revenue have introduced a question in the CT1 corporation tax return form to collect data on R&D outsourcing by companies. However, Revenue advises that this is an optional field, therefore robust data is not currently available in respect of these distinct elements of the credit.