US Chamber of Commerce Unhappy With Irish R&D Incentives

by Robin Pilgrim, LawAndTax-News.com, London

10 February 2004

The American Chamber of Commerce in Ireland has expressed dissatisfaction at the scope of the research and development (R&D) tax incentives announced in the recent Finance Bill.

Speaking to the Irish Independent, chief executive of the Chamber, Joanne Richardstown explained that the organisation's 570 member firms are disappointed that the tax relief will only apply to incremental R&D spending.

"Our representative companies will decide the next step forward because we do not believe that the system outlined in the Finance Bill will achieve the objective of making Ireland more attractive than other countries for R&D investment."

The US Chamber of Commerce welcomed the exemption from capital gains tax (CGT) for Irish resident companies on the disposal of shareholdings in domestic and overseas subsidiaries, and the changes to the tax treatment in Ireland's double taxation agreements of foreign dividend income paid to parent companies resident in the RoI.

However, Ms Richardstown suggested that in the absence of a competitive R&D tax relief system, those measures may be less than effective in attracting more multinationals to locate in the country.

"We believe that there is a need to expand tax credit incentives beyond incremental spend if more multinationals are to consider Ireland as a location for R&D," she concluded.

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