As advised in my response to the Deputy’s previous question (50062/21), a corporation tax return (CT1) already captures certain information in relation to the R&D credit, in particular information which is required for the purpose of calculating a company’s tax liability. From that information, Revenue publishes statistics on the R&D credit, which is available on the Revenue website at www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/r-and-d-tax-credits.aspx.
As also noted in that reply, any change to the corporation tax return requiring companies to provide more granular information on the kind of R&D activity they are undertaking would create additional administration for all firms, but especially smaller companies. While the Deputy suggests that this burden could be limited to multinational companies, I am mindful that, in claiming the R&D credit, firms are already required to prepare detailed paperwork demonstrating that they satisfy two tests:
- (1) that they are carrying on a qualifying activity (a science test) and
- (2) the amount of the claim is based on R&D expenditure incurred (an accounting test). These records are required to be made available to Revenue in the context of a compliance intervention.
While I do not consider that changes to the law are required at this time, as previously advised, the R&D credit, like any other tax expenditure, will be monitored and kept under review.
