Dan Neville (Limerick West, Fine Gael)
Link to this: Individually | In context

Question 119: To ask the Minister for Finance if he has evaluated the impact of the tax credit on incremental research; and if he will make a statement on the matter. [33119/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

A 20% tax credit applies to companies that incur incremental expenditure on research and development, R&D. An incremental tax credit is preferable to a volume based credit in that it lessens the dead-weight expenditure qualifying for the credit and encourages increases in R&D expenditure, which is the policy aim behind the incentive. The definition of R&D is based on best international practice.

The credit also helps to enhance our competitiveness as a location for new internationally mobile research-related investment, and will encourage existing overseas and indigenous firms to add research functions to their operations in Ireland or to increase their level of research activity. The strategy will move Irish industry up the value and knowledge chains, and will be of critical importance for the future health of our economy.

The credit was introduced in 2004 and it is too early for a detailed evaluation. The Revenue Commissioners have made specific provisions for collection of data on costs through company tax returns, thus information will be available on the costs of the credit in due course.

Paul Connaughton Snr (Galway East, Fine Gael)
Link to this: Individually | In context

Question 120: To ask the Minister for Finance if he has conducted an evaluation in conjunction with the Department of Health and Children of the tax relief for private hospital investment; and if it meets the public policy objectives in the health sphere. [33158/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

Capital allowances are available in respect of capital expenditure incurred on the construction of certain qualifying private hospitals. The expenditure can be written off over seven years at the rate of 15% per annum over the first six years and 10% in year seven.

Capital allowances for private hospitals is one of the many reliefs currently under detailed review by my Department in conjunction with the Revenue Commissioners and using external consultants.

The final reports from the consultants have been received by my Department and the findings from these reports will be taken into consideration in the context of the 2006 budget and Finance Bill.