Dáil Éireann Debate, Wednesday - 18 February 2026
48. Deputy Emer Currie asked the Tánaiste and Minister for Finance to provide details of any refundable or cash-redeemable tax credits available to businesses; and if his Department has examined the potential to make more use of refundable or cash-redeemable tax credits as an alternative to direct business grant for specific purposes. [13295/26]
Amharc ar fhreagraThe Research and Development (R&D) tax credit, the Film tax credit, the tax credit for Unscripted Production and the tax credit for Digital Games, are examples of tax measures that provide cash refunds to companies.
The Research and Development (R&D) tax credit, which was first introduced in 2004, is a broad measure that provides companies with a tax credit equal to 35 per cent of the qualifying expenditure incurred on qualifying R&D activities. The R&D tax credit is an important feature of the Irish corporation tax system. It forms part of a suite of corporation tax measures that ensures Ireland remains an attractive location for both domestic and inward investment and building an innovation-driven domestic enterprise sector.
The R&D tax credit has grown and evolved since its introduction in response to stakeholder feedback and, in 2022, it was restructured to align with the newly agreed international definitions of ‘Qualified Refundable Tax Credits’. The credit is generally payable over three years, with 50% payable in year one, 30% in year two and the final 20% in year three. A new first-year payment threshold was also introduced in 2022 and has subsequently been increased. From 2026, claims for the R&D tax credit of up to €87,500 are payable in full in the first year of claim as opposed to being paid over 3 years. The first-year payment threshold therefore accelerates the payment of the R&D credit due to companies with smaller claims, providing a cash-flow benefit to smaller R&D projects.
There are three refundable tax credits available to the audio-visual sector. The Section 481 Film tax credit, the tax credit for Unscripted Production and the tax credit for Digital Games.
Section 481 supports the production of certain film, tv and animation projects. The credit is available at a rate of 32% of eligible expenditure of up to €125 million per project. There is also a 40% Scéal Uplift rate available for smaller feature film productions, subject to certain conditions. A new rate of 40% for certain Visual Effects work was also announced as part of Budget 2026, the introduction of which is subject to European Commission approval.
The tax credit for Unscripted Production, commenced in December 2025, is available at a rate of 20 percent of certain production expenditure of up to €15 million per project. The credit is intended to support the continued growth of the domestic audio-visual sector in Ireland.
Finance Act 2021 introduced Section 481A - a refundable tax credit for the digital gaming sector. The relief is granted at a rate of 32 per cent of eligible expenditure of up to €25 million. The relief is granted at a rate of 32 per cent of eligible expenditure of up to €25 million. Budget 2026 provided for the extension of this credit to certain post-release development expenditure, subject to European Commission approval.
Tax expenditures are policy instruments used to promote specific social or economic goals that substitute for direct spending; typically, they take the form of tax exemptions, allowances, credits, or preferential rates. Government policy is based on the principle that tax expenditures should be used in limited circumstances where a demonstrable market failure exists, and the measure would be more efficient than a direct expenditure intervention. It should be noted that direct expenditure via grants and other forms of assistance, in line with State aid rules, can sometimes be more effective in achieving policy objectives than the granting of tax incentives or provide greater scope for targeting and/or transparency.
The aforementioned tax incentives are complemented by a much wider range of Government business supports provided by State bodies such as, for example, Enterprise Ireland and the IDA. This includes grant schemes, State equity investments, credit schemes and loan guarantees, advisory services, training programmes and networking facilitation for example.
Any decisions regarding taxation measures are made in the context of the annual Budget and Finance Bill processes, at the appropriate time, and having regard to the sound management of the public finances.
