15th October 2013
15th October 2013
Minister Seán Sherlock TD, the Minister for Research and Innovation today (Tuesday) welcomed the following improvements to the R&D tax credit:
· Increase in the amount of expenditure allowed on a full volume basis (i.e. without reference to the base year) from €200,000 to €300,000,
· Increase in the outsourcing limit from 10% to 15%, and
· Improvements to the “key employee provision”.
The Minister said that “these improvements will increase Ireland’s attractiveness as a location for Research and Development activity and will result in additional jobs during 2014”. The Minister also welcomed the statement of intent that the R&D tax credit base year will be phased out entirely over time as resources allow, in order to improve the overall international competitiveness of the regime.
ENDS
NOTES FOR EDITORS
Relevant Extract from the “Taxation Annexes to the Summary of 2014 Budget Measures” (pages B27-B28):
“Encouraging Innovation
10. Research and Development Tax Credit - Outsourcing
The limits on the amount of expenditure on R&D outsourced to third parties which can qualify for the R&D Tax Credit is being increased from 10% to 15%.
Target: This should help to assist small companies in performing R&D, as they are more likely to need to outsource because they may have insufficient resources in-house for certain functions. It should also support the outsourcing of discrete R&D tasks to smaller businesses.
11. Research and Development Tax Credit – Base Year
It is intended ultimately that the base year will be phased out entirely over time and as resources allow. In the interim, the amount of expenditure eligible for the R&D Tax Credit on a full volume basis (without reference to the 2003 base year) is being increased from €200,000 to €300,000.
Target: This measure will reduce the impact of the base year on companies who had significant R&D expenditure in 2003 and it will assist smaller companies to access the credit without reference to the base year. The phasing out of the base year, when complete, should improve the overall international competitiveness of the regime.
12. Research and Development Tax Credit – Key Employee
The key employee provision is in place in order to assist companies to attract key talent, by allowing the company to transfer the tax-free benefit of the R&D tax credit to employees who meet certain conditions. Some minor changes will be made to this element of the tax credit to remove some barriers to take-up that were identified in the review of the R&D Tax Credit which took place this year.
Target: This measure is to help R&D performing companies to attract key talent.”
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