Companies to get tax relief on R&D

Finance Minister Charlie McCreevy today announced that Irish companies will be able to avail of tax relief on their R&D expenditure.

A tax credit which will see up to 20% of incremental R&D expenditure set against corporation tax is to be introduced in next year's Finance Bill.

The Finance Minister said he had been prompted to make this move after employer groups such as ISME (Irish Small and Medium Enterprise) and IBEC (Irish Business and Employers Confederation) had convinced him that more R&D activity is essential for sustainable growth and innovation by Irish companies.

The scheme is subject to clearance by the European Commission and will be assessed after five years.