€20m cut to foster investment

THE Government has given a €20 million cut in corporation tax to encourage research and development investment.

Brian Lenihan told the Dáil that the R&D tax credit available to companies will increase from 20% to 25%, putting it to the forefront of R&D regimes globally.

“This will increase Ireland’s attractiveness as a location for R&D activity and it will provide a well-targeted stimulus for such value-added activities. I will consider making further enhancements in the forthcoming Finance Bill,” Mr Lenihan said.

This is on top of providing more than €300m for the continued implementation of the Strategy for Science, Technology and Innovation, to drive what Mr Lenihan described as “world class research and in-company research and development with a view to commercialising new ideas and know-how for the longer term benefit of the economy”.

The allocation to Science Foundation Ireland in 2009 increased to €179m, up from €172m this year, while Enterprise Science Technology Innovation will receive a 2.5% year on year increase, bringing it to €127m in 2009.

Corporate Tax Partner with Ernst & Young, Joe Bollard, welcomed the increase in the Research & Development credit from 20% to 25%.

However, he called on the minister to accelerate the introduction of measures to stimulate Intellectual Property intensive industries ahead of the Commission on Taxation finalising its report next year.

“It may be too late to wait until then,” Mr Bollard said.