Michael McGrath (Cork South Central, Fianna Fail)
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The research and development (R&D) corporation tax credit, as provided for in Part 29 of the Taxes Consolidation Act 1997, is available to companies, including companies operating in the green technology space, which are within the charge to Irish tax and which incur expenditure on qualifying R&D activities. The legislation is supplemented by the Taxes Consolidation Act 1997 (Prescribed Research and Development Activities) Regulations 2004 which set out the categories of R&D activities which may qualify for the credit.

For accounting periods commencing on or after 1 January 2024, the R&D corporation tax credit is available at a rate of 30% of allowable expenditure. For accounting periods commencing before this date, the rate of the credit is 25%.

The company must undertake qualifying R&D activities within the European Economic Area (EEA) or the UK and, in the case of an Irish tax resident company, the expenditure must not qualify for a deduction for the purposes of tax in another territory.

In making a claim for the R&D corporation tax credit, companies must satisfy two tests: the activity must be a qualifying activity (a science test) and the amount of the claim must be based on R&D expenditure incurred (an accounting test).

For the activities to be qualifying R&D activities, they must be systematic, investigative or experimental activities in a field of science or technology and involve one of the following research categories:

• Basic research,
• Applied research, or
• Experimental development.
• In addition, the R&D activities must seek to achieve a scientific or technological advancement and involve the resolution of scientific or technological uncertainty.
• The R&D corporation tax credit is available in respect of expenditure incurred wholly and exclusively in the carrying on by the company of qualifying R&D activities.
• In relation to the Deputy's query on expenditure incurred on research and development activities undertaken in the green technology space, there are no sectoral restrictions on the R&D tax credit so it is available in respect of expenditure on R&D activities undertaken in the green technology space where the qualifying criteria are met.
• Full information regarding the R&D corporation tax credit, including the categories of activities which may qualify for the credit, is available in Revenue’s published Tax and Duty Manual on the Research and Development (R&D) Corporation Tax Credit, which can be accessed on the Revenue website at: www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-29/29-02-03.pdf