Mr. Rónán Hession:

We have few reliefs in corporation tax. One is talking about the research and development tax credit, relief for losses and then a relatively minor relief in terms of three-year start-up relief, which, I understand, is approximately €40 million.

The research and development tax credit has been increasing. The chairman of the Revenue Commissioners has given a further, more recent figure, which is €708 million for 2015. At budget time, we published our review which looked at the increase in cost, trying to get an understanding of what was the profile of companies involved. It also looked at the bang for buck, that is, what extra research and development one is getting for this and to what extent is it additional or not. The results were that the so-called additionality is 60%. In other words, of the extra research and development, 60% would not have happened without the research and development tax credit and the bang for buck was 2.4, that is, every time one spent €1 on the research and development tax credit one gets €2.40 in extra research and development.

The figures show that the number of claimants have plateaued at approximately 1,500 for the past number of years. Bear in mind, the cost of the credit reflects the amount of research and development being done out there, one gets a 25% credit, and the amount of research and development in the system is, therefore, four times what the credit costs. The tax credit has real substance. It is defined by reference to international standards in research and development, but we do watch it closely. We do not have that many reliefs. We have quite a small number of reliefs on the corporation tax side.

At budget time we published quite a detailed report which shows the profile. Some of the older, larger foreign companies still avail of it. That is not all that surprising when we look at the profile of companies engaged in research and development and the broader figures on the business expenditure on research and development, BERD.

It has increased and we do watch it closely. We published a review in 2013 and last year's review was our second quite deep dive into that area. We have an approach to tax expenditures in the Department where everything is on a cycle of three years and we will look at issues sooner if we feel there is a policy reason to do so. One of the lessons from the 2000s was not to leave tax expenditures in the system without being fundamentally looked at on a periodic basis and we do that on a three-year cycle. We had a look at it last year, 2013 was the previous one and we will continue to watch it.