I propose to take Questions Nos. 137 to 143, inclusive, together.
I am advised by Revenue that detailed statistical information in respect of the Research & Development (R&D) credit is available at https://www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/r-and-d-tax-credits.aspx for 2012 to 2017 (earlier years are not readily available and estimates of refunds for future years are not prepared).
Regarding Questions 30305/19, 30306/19 and 30310/19, the published statistics include the cost of repayable tax credits (page 3). Where there is no Corporation Tax liability in a given year, a company may claim to have the credit paid to them in 3 instalments over a period of 33 months. The following table shows the number of companies and the average refund amount. Due to Revenue’s obligation to observe confidentiality for taxpayer information, it is not possible to show the highest refund.
Year
|
Number of Companies
|
Average Refund
€
|
2012
|
1,067
|
127,900
|
2013
|
1,092
|
215,650
|
2014
|
1,067
|
305,400
|
2015
|
1,027
|
349,450
|
2016
|
1,025
|
230,480
|
2017
|
1,025
|
147,800
|
Regarding Questions 30307/19 and 30308/19, it is not possible to accurately estimate the savings if the R&D tax credit was no longer payable, which would require an estimate of the outstanding liability to the State from refundable payable research and development credits, as information in respect of either the outstanding current liability or future expenditure is not available from tax returns. However, on the basis of claims from the 2017 tax returns, it is tentatively estimated that the full year gain from abolishing the refundable credits aspect of the R&D tax credit could be in the region of €150m.
Regarding Question 30309/19, information in respect of relief for key employees engaged in research and development activities is available on the tax returns for the years 2013 to 2017. Tax returns for later years are not yet available. The number of individuals claiming the relief for the years 2013, 2015 and 2017 was less than 10 in each of these years, with a cost in each year of less than €0.05 million. For 2014 there were 25 individuals with an average claim of €2,721. For 2016 there were 11 individuals with average claim of €4,438 The highest claim cannot be provided due to Revenue’s need to protect taxpayer confidentiality.
Finally regarding question 30311/19, I am advised by Revenue that companies currently claim the R&D tax credit when making their self-assessed tax return. Accordingly, there is no need for them to provide supporting documentation at the point of claim.
Revenue carries out a programme of targeted risk driven compliance interventions on self-assessment tax returns. Claims for the R&D tax credit fall within the scope and is one area of focus for this programme. Revenue is of the view that this is the most effective way for them to ensure that only valid claims for the research and development credit qualify as repayable tax credits.