Eamon Ryan (Dublin South, Green Party)
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Question 142: To ask the Minister for Finance if he will report on the use that has been made to date of research and development tax relief; and if he will make a statement on the matter. [29983/04]

Brian Cowen (Laois-Offaly, Fianna Fail)
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A 20% tax credit was introduced in the Finance Act 2004 for qualifying incremental expenditure by companies on research and development activity. A commencement order was made by my predecessor in July 2004 bringing the measure into effect for qualifying research and development expenditure incurred on or after 1 January 2004.

As the measure was only introduced this year it is too early to assess the impact of the credit. However the Government is mindful of the need to assess its effectiveness and an assessment will be done by my Department over the next number of years in tandem with the Department of Enterprise, Trade and Employment and the relevant state agencies.

A special tax relief for research and development was introduced in the 1995 Finance Act. The tax relief provided, in addition to the normal deduction to companies in computing trading income for research and development expenditure, an additional treble deduction for incremental expenditure on research and development. The incentive applied on a group basis to the excess of annual group incremental expenditure over £25,000, €31,743.45. The research and development project was also required to be approved by Forbairt. The tax relief applied for a three year period provided the three year period did not commence on or after 1 June 1999. I am informed by the Revenue Commissioners that there are no statistics available to them on the take up of this relief, however the indications are that the relief was not widely availed of.