Richard Bruton (Dublin North Central, Fine Gael)

I move amendment No. 24:

In page 91, between lines 35 and 36, to insert the following:

"(b) in subsection (1)(a) in the definition of "group expenditure on research and development" by inserting the following after subparagraphs (i) and (ii):

"(iii) expenditure (in this section referred to as 'relevant expenditure') on research and development incurred by a company which is a member of a group in developing intellectual property within the meaning of section 291A that is transferred to a company incorporated in the State that complies with section 495 shall not be included in group expenditure on Research and Development in relation to that group. The relevant expenditure will be treated as a separate Research and Development activity distinct from all other R&D activities carried on by the group for the purposes of this section.",".

This is the targeted type of measure towards which the Minister is likely to be more sympathetic. It was designed by Senator Paschal Donohoe and I am sure the Minister will get a fuller presentation of its merits from the Senator when the Minister goes to the Seanad to hear its recommendations.

Essentially, Senator Donohoe is suggesting that there are ideas which could allow spin-off companies to be established and this measure is a tax incentive designed to encourage such spin-offs. I know the Senator has made a significant study of the knowledge economy opportunities that are available to us. This was designed specifically to focus on opportunities that might otherwise go a-begging or be developed elsewhere.

An amendment of this nature is worth considering because, while we lean over backwards to produce legislation that will facilitate financial services establishments to set up business here, and more power to them, this was designed to focus on whether within our own pool of talent we can see spin-offs that would generate economic activity from good ideas that have been developed within companies but which might not be core to a company's activity. It would encourage the launch of these as business opportunities.

Of course, the Minister will say there is the risk of revenue loss, which no doubt there is. However, this is genuinely targeted at new business start-ups. I know a more jaundiced eye is examining patent relief at present and perhaps the recycling of some of the patent relief money into ideas like this could bring about a better spin-off for the country in terms of high value start-ups that have a chance of developing into the future.

I ask the Minister to consider this amendment sympathetically. He will go to the Seanad and then come back to this House and, if he is not persuaded by my arguments, which have been cobbled together, I am sure Senator Donohoe will bring to bear new logic on this matter. The Minister may return to this House saying "Now, I see it. It was just not explained very well in the Lower House".

See this speech in context