Sunday 25 September 2016

Revenue will pay experts €1,000 a day to help assess R&D tax claims

Published 12/01/2016 | 02:30

R&D tax credits cost the exchequer €421m in 2013.
R&D tax credits cost the exchequer €421m in 2013.

The Revenue Commissioners will pay experts almost €1,000 a day each to help assess whether companies that apply for research and development tax credits are entitled to them.

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A new panel is being assembled that can be called upon by the taxman, and members have to be qualified to PhD level.

Qualifying research and development undertaken here by a company with an Irish tax liability is eligible for a 25pc tax credit that can be offset against a company's corporation tax liability, or returned as cash where no tax liability has arisen.

The qualifying R&D can also have been carried out by the company in European Economic Area, which includes EU member states, plus Iceland, Norway and Liechtenstein.

R&D tax credits cost the exchequer €421m in 2013. The R&D that qualifies for the tax credit must be focused on the natural sciences, engineering and technology, medical sciences, or agricultural sciences and also fulfil other criteria.

Companies also have to agree to allow the qualifying R&D to be examined by an independent assessor appointed by the Revenue Commissioners. The new panel of experts being drafted will be in place for 2016.

They're tasked with reviewing technical information provided by a claimant company in relation to a claim; accompanying a Revenue auditor on a site visit; conducting their own site visits; submitting reports; evaluating the amount due under a claim; and giving evidence where a claim is appealed.

When they're actively engaged by the Revenue, the experts will be paid €920 a day. They also have no sign confidentiality agreements.

Before an expert is engaged by the Revenue to assist in a particular claim, the Revenue Commissioners notify the claimant company as to the identity of the expert and the information that expert will receive.

"A claimant company may object to the use of a particular expert where it has reason to believe there would be a genuine conflict of interests," the Revenue notes.

"In any case of dispute the claimant company will have the right of appeal to the Appeal Commissioners against the use of a particular expert."

For the accounting period from 1 January 2015, there is no minimum threshold for R&D spending that can qualify for the tax credit.

The total R&D spend in Ireland amounted to just under €2.9bn in 2014, according to Eurostat. That equated to 1.55pc of GDP. The figure still lags the EU average of 2.03pc.

One of the European Union's aims is to increase the total R&D spend across the trading block to 3pc of GDP by 2020.

Irish Independent

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