S.I. No. 434/2004 - Taxes Consolidation Act 1997 (Prescribed Research and Development Activities) Regulations 2004

I, MARY HARNEY, Minister for Enterprise, Trade and Employment, in exercise of the powers conferred on me by section 766 of the Taxes Consolidation Act 1997 (No. 39 of 1997) (inserted by section 33 of the Finance Act 2004 (No. 8 of 2004)), and having consulted with the Minister for Finance, hereby make the following regulations:

1. These Regulations may be cited as the Taxes Consolidation Act 1997 (Prescribed Research and Development Activities) Regulations 2004.

2. These Regulations shall be deemed to have come into operation on 1 January 2004.

3. Without prejudice to Regulation 4 of these Regulations, an activity shall not be a research and development activity for the purposes of section 766 of the Taxes Consolidation Act 1997 (No. 39 of 1997) (inserted by section 33 of the Finance Act 2004 (No. 8 of 2004)) unless it is a research and development activity falling within one or more of the following categories:

(1) an activity undertaken in the field of natural sciences, namely—

(a) mathematics and computer sciences, including mathematics and other allied fields, computer sciences and other allied subjects and software development,

(b) physical sciences, including astronomy and space sciences, physics, and other allied subjects,

(c) chemical sciences, including chemistry and other allied subjects,

(d) earth and related environmental sciences, including geology, geophysics, mineralogy, physical geography and other geosciences, meteorology and other atmospheric sciences, including climatic research, oceanography, vulcanology, palaeoecology, and other allied sciences, or

(e) biological sciences, including biology, botany, bacteriology, microbiology, zoology, entomology, genetics, biochemistry, biophysics and other allied sciences, excluding clinical and veterinary sciences,

(2) an activity undertaken in the field of engineering and technology, namely —

(a) civil engineering, including architecture engineering, building science and engineering, construction engineering, municipal and structural engineering and other allied subjects,

(b) electrical engineering, electronics, including communication engineering and systems, computer engineering (hardware) and other allied subjects, or

(c) other engineering sciences such as chemical, aeronautical and space, mechanical, metallurgical and materials engineering, and their specialised subdivisions, forest products, applied sciences such as geodesy and industrial chemistry, the science and technology of food production, specialised technologies of interdisciplinary fields, for example, systems analysis, metallurgy, mining, textile technology and other allied subjects,

(3) an activity undertaken in the field of medical sciences, namely—

(a) basic medicine, including anatomy, cytology, physiology, genetics, pharmacy, pharmacology, toxicology, immunology and immunohaematology, clinical chemistry, clinical microbiology and pathology,

(b) clinical medicine, including anaesthesiology, paediatrics, obstetrics and gynaecology, internal medicine, surgery, dentistry, neurology, psychiatry, radiology, therapeutics, otorhinolaryngology and ophthalmology, or

(c) health sciences, including public health services, social medicine, hygiene, nursing and epidemiology,

(4) an activity undertaken in the field of agricultural sciences, namely—

(a) agriculture, forestry, fisheries and allied sciences, including agronomy, animal husbandry, fisheries, forestry, horticulture, and other allied subjects, or

(b) veterinary medicine.

4. Without prejudice to the generality of clauses (I) and (II) of the definition of “research and development activities” in section 766 of the Taxes Consolidation Act, an activity falling within any of the following categories shall not be a research and development activity for the purposes of that section:

(a) research in the social sciences (including economics, business management and behavioral sciences), arts or humanities,

(b) routine testing and analysis for the purposes of quality or quantity control,

(c) alterations of a cosmetic or stylistic nature to existing products, services or processes whether or not these alterations represent some improvement,

(d) operational research such as management studies or efficiency surveys which are not wholly and exclusively undertaken for the purposes of a specific research and development activity,

(e) corrective action in connection with break-downs during commercial production of a product,

(f)  legal and administrative work in connection with patent applications, records and litigation and the sale or licensing of patents,

(g) activity, including design and construction engineering, relating to the construction, relocation, rearrangement or start-up of facilities or equipment other than facilities or equipment which is or are to be used wholly and exclusively for the purposes of carrying on by the company concerned of research and development activities,

(h) market research, market testing, market development, sales promotion or consumer surveys,

(i)  prospecting, exploring or drilling for, or producing, minerals, petroleum or natural gas,

(j)  the commercial and financial steps neccessary for the marketing or the commercial production or distribution of a new or improved material, product, device, process, system or service,

(k) administration and general support services (including transportation, storage, cleaning, repair, maintenance and security) which are not wholly and exclusively undertaken in connection with a research and development activity.

EXPLANATORY NOTE.

(This note is not part of the Instrument and does not purport to be a legal interpretation.)

This note specifies the categories of activities which are research and development activities and the categories of activities which are not research and development activities for the purpose of section 766 of the Taxes Consolidation Act 1997 (inserted by section 33 of the Finance Act 2004 ).