Dáil Éireann Debate, Tuesday - 8 February 2022
257. Deputy Rose Conway-Walsh asked the Minister for Finance the last time a departmental tax expenditure evaluation was conducted on the research and development tax credit in accordance with the guidelines for tax expenditure evaluation; and if he will make a statement on the matter. [6529/22]
View answerAs with all tax expenditures, the R&D tax credit is regularly evaluated to assess its continuing relevance and impact. In line with my Department’s Tax Expenditure Guidelines, an evaluation of the R&D tax credit took place over 2019 and 2020.
This evaluation, as part of its scope, examined the interaction between SMEs and the credit and looked at elements of the R&D regimes in other countries that are focused on smaller claimants.
My Department launched a public consultation on the R&D Tax Credit in 2019, which formed part of a broader review of the R&D Tax Credit. The evaluation was challenging as a novel data set of taxpayer data was used and there was no recent policy change to use as an anchor for statistical analysis.
The onset of the Covid-19 crisis, and the challenges associated with the end of the Brexit transition period, required the reallocation of resources before these difficulties could be resolved.
However, the methodological issues identified will be valuable in informing my officials’ approach to the next review of the credit, due to take place this year.
