Open memo to Irish Exporters Association members, from John Whelan, Chief Executive.
16th Oct 2008
Some Potential Gains for Exporters in 2009 Budget
The Irish Exporters Association maintains it’s stance on the need for cut-backs in current government expenditure to balance the Budget in the coming years , but they also point to the positive aspects of Budget ’09 , and state that Irish exporters must focus aggressively on maximising the incentives made available by Minister Lenihan’s budget.
In particular the IEA point to;
>Tax Credit scheme on R & D expenditure, which increased from 20% to 25%;
This is a welcome enhancement in the context of global competition for high end research and new product development.
Regrettably, there are very few companies availing of this tax incentive. The IEA urge companies to review all their process improvement to see if it is a ‘’qualifying activity’’; to look at their building and equipment programmes to see if they can be quantified as a ‘’qualifying resources’’.
The IEA noted that the Minister had promised in his Budget speech that there would be further improvements in the Finance Bill. Any companies who have particular issues with the R& D tax credits should contact the IEA , who will give assistance in clarifying the issues with the Dept of Finance , and ensuring the Finance Bill takes care of any anomalies.
> Capital Allowance on Energy Efficient Equipment , which had the existing 100% capital allowance extended to the following 4 new categories of equipment ;
1. Data Servers and other ICT equipment
2. Efficient heating and electrical control equipment
3. Efficient process, ventilating and air conditioning equipment
4. Alternative fuel vehicles.
The IEA point out that there is potentially a wide application to this capital allowance incentive, and recommends to companies to take a fresh look at their equipment register.
In terms of ensuring future tax burdens are minimised, the IEA recommend the following;
· Carbon Levies were deferred until Sept 2009, at which stage the Taxation Commission are due to report and make their recommendations. The IEA have already made submissions to the Taxation Commission( see IEA website), but urge companies to review their carbon foot print and if there is concern at the emissions level of the business then they should consider making a Submission to the Taxation Commission to ensure they do not inadvertently fall under an excessive Carbon levy regime. The IEA are available to help any companies who wish to make a submission.
· The Intellectual Property treatment has potential to improve competitiveness of Ireland as a location for FDI. The Minister has left the door open for improvements in the treatment of the Revenue Commissioners in 2009. Again any companies who wish to make representations on IP should contact the IEA who will assist with submissions.
John F. Whelan