Dáil Éireann Debate, Wednesday - 15 October 2025
113. Deputy Emer Currie asked the Minister for Finance when he expects to publish the Research and Development Compass referred to in his Budget 2026 speech; if he will engage with key stakeholders, including industry representatives, to ensure that proposed reforms are practical and reflect the realities of how R&D is conducted in Ireland; and if he will make a statement on the matter. [55878/25]
View answer114. Deputy Emer Currie asked the Minister for Finance if the Research and Development Compass will benchmark Ireland’s R&D tax credit regime against those of other EU or OECD countries to assess international competitiveness; and if he will make a statement on the matter. [55879/25]
View answer115. Deputy Emer Currie asked the Minister for Finance the intended purpose and format of the forthcoming Research and Development Compass referenced in his Budget 2026 speech; if he will confirm whether it will take the form of a stand-alone publication or inform the development of a wider policy framework; and if he will make a statement on the matter. [55880/25]
View answerI propose to take Questions Nos. 113, 114 and 115 together.
Ireland first introduced a tax credit for R&D in 2004, which is available to all companies within the charge to Irish tax who carry out qualifying R&D activities. The policy objective of the R&D tax credit is to increase business R&D in Ireland as R&D supports high-value employment and can contribute to higher innovation and productivity.
The Programme for Government ‘Securing Ireland’s Future’ made a commitment to review the Research and Development (R&D) tax credit regime and to examine options to enhance the R&D tax credit, reward innovation and digitalisation. As part of this review a public consultation on the ‘R&D Tax Credit and on Options to Support Innovation’ was conducted. Twenty-six responses to the consultation were received from a range of respondents, including companies engaged in R&D activities, advisory firms, representative bodies and Government Departments. The responses to the consultation have been published on my Department’s website. In addition to the consultation, officials from my Department engaged with stakeholders throughout the year through meetings, roundtable discussions and prebudget submission meetings.
This consultation process, together with pre-Budget submissions received across the year, has informed the development of the R&D Compass. The consultation process also provided valuable input into policy considerations for enhancing the regime in Budget 2026. On Budget Day I announced the increase in the rate of the R&D tax credit from 30% to 35%, which will be of benefit to all claimant companies, and an increase in the first-year payment threshold from €75,000 to €87,500 to support smaller R&D projects. Further details of these measures will be included in the Finance Bill.
Although there has been no specific benchmarking analysis conducted as part of the Compass, I am cognisant of the fact that Ireland’s tax regime and R&D regime need to continue to be competitive, and in line with international best practices. I would also note that tax is just one aspect of Ireland’s competitive offering, there are a suite of factors that are taken into account by businesses when determining if a location is competitive. An important factor often cited by businesses is Ireland’s consultative approach to policy making. Throughout a period of significant change in global taxation, frequent consultation and signposting of future developments by my Department, for example by Corporation Tax Roadmaps, has provided certainty to stakeholders to allow them make investment decisions with confidence. The R&D Compass, which I will publish in the coming weeks, will be a standalone publication in that it focusses specifically on the R&D tax credit and potential supports for innovation, but it forms part of my Department’s wider approach to policy development.
The R&D Compass will provide stakeholders with information on potential future enhancements and areas of focus with regard to the Research and Development Tax Credit, to better align with industry practices. It will also set a pathway for development of innovation supports. This ongoing work will confirm that this Government recognises the importance of ensuring that Ireland remains attractive as a location for quality employment and investment in high value R&D and innovative activities by both domestic and international companies.
