Budget 2012 – positive R&D tax credit changes

Budget 2012 – positive R&D tax credit changes

The Minister for Finance has announced this week some very positive changes to the R&D Tax Credit scheme. These will benefit both SME’s and larger companies.

The influence of IRDG is clear to be seen in today’s announcement as the suggestions were largely contained in submissions made by IRDG during 2012 and were discussed at a recent meeting with Revenue. IRDG will continue to engage with Revenue between now and the Finance Bill and thereafter to ensure the detail associated with these changes will be to the greatest benefit of our members.

The Minister said

“In addition to the Loan Guarantee Fund and Micro Finance Fund announced by the Minister for Jobs, Enterprise and Innovation, Richard Bruton T.D., I am announcing that:
• The first €100,000 of R&D expenditure of all companies will be allowed on a volume basis for the purpose of the R&D Tax Credit;
• The outsourcing arrangements for R&D purposes will be improved in a targeted manner to allow the greater of the existing percentage arrangement or €100,000;
• Companies will have the option to use some portion of the R&D credit to reward key employees who have been involved in the development of R&D;
• The corporate tax exemption for new start up companies is being extended for the next three years and will be available for companies that commence trading in 2012, 2013 and 2014; and
• As already announced, smaller companies will also be able to avail of the planned foreign earnings deduction where they plan to expand their export markets into the BRICS countries.”

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The IRDG is an industry-led representative group for manufacturing and services companies involved in Research, Development and Innovation (RD&I). Established by industry in 1992, the Group is an independent, non-profit body, serving the needs of members on all matters relating to RD&I.

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