James O'Connor (Cork East, Fianna Fail)
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145. To ask the Minister for Finance if he is examining options to enhance the research and development tax credit, to reward innovation and digitalisation; and if he will make a statement on the matter. [39275/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Research and Development (R&D) Tax Credit is an important feature of the Irish CT system. It forms part of a suite of corporation tax measures that ensures Ireland remains an attractive location for both domestic, inward investment and building an innovation-driven domestic enterprise sector. The primary policy objective is to increase business R&D in Ireland. Ireland has successfully created a globally competitive innovation hub, and the R&D tax credit has played a large part in that success. Both domestic and multinational firms in Ireland support thousands of Irish jobs, Irish companies and Irish education institutions.

As one of the largest corporation tax expenditure items, the R&D tax credit is reviewed regularly under the Department of Finance’s Tax Expenditure Guidelines, to ensure that it is effective and delivering on the intended policy objective. Budget 2025 announced that this review would be undertaken this year, and the Programme for Government 2025 ‘Securing Ireland’s Future’ made a commitment to examine options to enhance the R&D tax credit, reward innovation and digitalisation.

Work on the review of the R&D tax credit regime is underway this year and has included a ‘Public Consultation on the R&D tax credit and on Options to Support Innovation’. 26 responses to the consultation have been received from a range of respondents, including companies engaged in R&D activities, advisory firms, representative bodies and Government Departments.

The feedback received in these responses will help to inform policy considerations for the R&D regime and in relation to innovation, to ensure that Ireland remains attractive as a location for quality employment and investment in R&D by both domestic and international companies. Work on the R&D review will continue to progress throughout the year and will inform my policy deliberations in advance of Budget 2026, in line with Programme for Government commitments.