Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

I am a wee bit confused with these numbers. I understand the numbers behind keeping the value of the tax credit at the value. If a company got €1 million of tax credit for €4 million of investment last year and if it does the same investment next year, it will still get the €1 million. If we did not do what we are doing here, it would only get €875,000 because the €1 million would be taxed at 12.5%. I understand the logic of that and this measure does maintain the value of the tax credit. However, the costing of this is problematic. The real cost of this for the in-scope companies is €137 million, so that makes more sense to me. Then the Minister is netting off the top-up tax, which really is separate, in fairness. When it is reported, the tax credit will be stated as an extra €137 million, and then there will be corporation tax receipts that will have an effect on that. I understand the net cost, but when we look at the Revenue Commissioners' report next year, will we not see an increase of €137 million as opposed to €14 million? The tax credit is going to increase in value. The €1 million research and development tax credit the company I am talking about got is going to be €1.2 million next year, but when we then tax it at 15% as opposed to 12.5%, the value of it goes back down to €1 million. Am I right in saying the research and development tax credit as it is reported will show a higher number? It will show €137 million, but the real effect of the policy is that we will get most of that back on the corporation tax end. If that is the case, that is fine. I understand the logic of that. How come it is costing so little - €13 million - for the companies that are not in scope, because we are not getting the credit back through an increased level of taxation? How come it is only €13 million for all those other companies? The number of companies in scope is small. I do not understand that and perhaps the Minister could speak to us about that.