Public consultation on Ireland's research and development (R&D) tax credit regime runs until 19 May 2025 and is aimed at enhancing Ireland's competitiveness, which is particularly pertinent in light of recent trade tariffs.

Since its introduction in 2004, Ireland's R&D regime has provided a tax credit on qualifying R&D expenditures, with cash refunds increasing to 30% for qualifying R&D expenditure incurred from 1 January 2024.

The Programme for Government is committed to examining options to enhance the R&D tax credit regime, reward innovation and digitalization, and encourage innovation by indigenous and international companies. Aligned with this, the Department of Finance is seeking insights on the regime's significance, impacts and challenges that may form the basis for enhancements to the regime.

The consultation is primarily focused on questions relating to the R&D tax credit regime, categorized into the following areas:

• General queries
• Subcontracting activities to academia
• Spill-over effects of collaborating with academia
• Subcontracting R&D to unrelated third parties
• Grant funding
• Future of R&D

In addition, the consultation seeks stakeholders' views on initial key scoping considerations to help formulate a potential policy on innovation. There are four specific issues in this regard that look to address the following:

1. Defining innovation
2. Government objectives that a support should target
3. State aid framework of relevance
4. Administrative oversights needed

EY Ireland will be responding to this Consultation.

Implications

Interested parties should consult their tax advisors (e.g., EY Ireland's Innovation Incentives team, listed below) to discuss this Consultation process.

Further details on the Consultation can be found here.