Clare Daly (Dublin Fingal, Independent)
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300. To ask the Minister for Finance in view of the fact that corporation tax paid by multinationals can be reduced or even turned into a negative number by refundable research and development tax credits, the sectors which have claimed most such credits; and the net rate of tax paid by these companies. [25665/16]

Michael Noonan (Limerick City, Fine Gael)
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The R&D tax credit must be used initially to reduce the corporation tax liability of the company for the accounting period in which the expenditure on research and development or relevant expenditure is incurred.

Any unused amount may be carried forward and used to reduce the corporation tax of following accounting periods. However where an excess remains, instead of carrying forward that excess, a company may claim to use it to reduce the corporation tax of the preceding accounting period.  If any excess still remains it may still be carried forward and used to reduce the corporation tax of succeeding accounting periods.

As an alternative, in the event that there is no corporation tax liability in the current year, the company may claim to have the amount of that excess paid to them by the Revenue Commissioners in 3 instalments over a period of 33 months from the end of the accounting period in which the expenditure was incurred.

A Review of the R&D Tax Credit was carried out by my Department in 2013 and the results were published on the Department's website.  This review found that the payable element of the credit is important for Irish firms:

- For smaller, typically indigenous firms, to assist with cash-flow; and

- For Irish subsidiaries of Multi-National Companies when competing with other subsidiaries in other jurisdictions to win internal R&D project to Ireland.

Based on the analysis of Revenue data that was carried out as part of this review, the payable element of the tax credit is used by more micro and small firms than large.

I am informed by the Revenue Commissioners that 1,570 companies availed of the Research and Development tax credit in 2014 (the most recent year available) at a cost of €553 million. A sectoral breakdown is shown in the the following table.

This sectoral breakdown is based on the classification on tax records which is compiled by reference to the primary area of economic activity reported by individual or corporate taxpayers. While the accuracy of the sector classification on tax records is sufficient to underpin broad sector-based analyses, there may be some inaccuracies at individual level. This should be borne in mind when considering the information provided.