Tax credit R&D research and development Ireland

Contact person 
Terry O'Brien
Institution 
South-East Regional Authority
E-mail 
terry.obrien@southtippcoco.ie
Country 
Ireland
Do you want to share an instrument/policy or a knowledge Transfer practice? 
Innovation instrument(policy)
What are the following keywords/priorities which better fit the instrument/policy?  
Direct support of business R&D (grants and loans)
Indicate the country from which the instrument (or policy) is 
Ireland
What is the title/name of the instrument/policy? 
Tax credit R&D research and development Ireland
Indicate the target group/beneficiaries of the instrument/policy 
All companies
What is the aim/objective? 
The Research and Development (“R&D”) tax credit, administered by the Revenue Commissioners, is open to all companies in Ireland that are undertaking qualifying research and development activities in Ireland or within the European Economic Area. A 25% rate of credit applies to incremental expenditure on R&D incurred by Irish tax resident companies that are trading or are members of a trading group. The tax credit is primarily available for offset against the current year or immediate prior year corporation tax liability and is in addition to the corporate tax deduction that is otherwise available for the expenditure.
Give an overview of the instrument 
The R&D tax credit system is based on incremental expenditure on R&D over a calendar year (i.e. January to December). The base year has remained at 2003 for the R&D tax credit system, and the R&D tax credit is based on the incremental R&D expenditure for the current tax year as compared to R&D expenditure in 2003. For all relevant periods commencing at any time after 31 December 2003 the base period is one year ending on a date within the year that corresponds with the end of the relevant period. In order to qualify for the R&D tax credit, a company must undertake qualifying R&D expenditure in the European Economic Area.
What is the date of creation of this instrument? 
Thursday, January 1, 2004
Is the instrument/policy still active? 
Active
Identify the main outputs/results (quantitative and qualitative) of the implementation of this instrument 
Since its introduction in 2004, the R&D tax credit has influenced the decisions of many multinational firms to locate internationally mobile R&D projects in Ireland. IDA Ireland, the national agency responsible for foreign direct investment, estimates that over 40% of the projects it attracts into Ireland are R&D-related. A survey in 2011 by a leading accountancy services provider, KPMG, found that 80% of companies surveyed were not claiming the R&D tax credit. Recent data provided by the Revenue Commissioners, the national agency responsible for tax collection in Ireland, indicate that 582 companies availed of the R&D tax credit in 2008 on an estimated R&D investment of 729m Euro. The number of companies using the tax credit rose to 1,172 in 2010 on an estimated R&D investment of 832m Euro.
What is the co-financing/maximum rate allowed by the instrument/policy (if appl.)? 
The first €200,000 R&D spend is eligible for credit.
Is this instrument/policy linked to a KT practice? 
No