Chartered Accountants Ireland as a member of CCAB-I has responded to the Department of Finance invitation for submissions on the R&D Tax Credit. In the response we note that that CCAB-I has made a number of previous submissions to the Department on suggested improvements to the R&D tax credit regime. The profession believes that the priorities should be to reward individual innovators and end discrimination against companies which have invested in R&D since 2003.

Our key recommendations to improve R&D are:

• The introduction of a special income tax rate of 12.5% which will be available on income and bonuses paid to inventors and employees directly involved in the R&D activity
• Application of the special 12.5% rate of income tax on dividend income paid to shareholders of a company involved in innovation.
• The 12.5% rate of income tax should constitute the final liability inclusive of Universal Social Charge and PRSI.
• Abolition of the 2003 base year threshold which will remove the discrimination between companies established before 2003 and those who came into the market after that date while encouraging otherwise restricted companies to increase annual expenditure beyond €200,000.

The CCAB-I response to the current R&D Tax Credit review is published in full on pages 29.