Mr. Niall Cody:

I have a couple of questions for Mr. Cody in respect of research and development. He stated earlier that he regards it as critical. All members and witnesses can understand and appreciate how important the R&D tax credit is in terms of supporting small businesses across Ireland, be they in manufacturing, wholesale or communications, and how the 37.5% tax relief helps fund innovation. The witness also referred to the 2013 review which said the tax credit plays an important role in assisting Ireland in meeting its 2020 target for R&D expenditure. The significant importance of R&D investment decisions was mentioned. The tax credit is an important element of Ireland's corporation tax regime in terms of attracting foreign direct investment to Ireland. The success of the scheme is evident. As Mr. Cody said, it has grown from €71 million to €500 million in over a decade.

In terms of statistics, the Revenue report, An Analysis of 2015 Corporation Tax Returns and 2016 Payments, published in April 2017, shows that the number of companies claiming the R&D tax credit fell.