R&D Tax Credits for the Oil and Gas Industry

Increasing Efficiencies in the Oil & Gas Industry

The challenge of exploring and drilling oil and gas has continued to expand due to ever-declining oil reserves as well as limited accessibility where these resources are found. In order to overcome part of this challenge, the research and development focus in this sector has been geared towards increasing the operational efficiency, costs reduction, and improvement of safety measures. However, this cannot be achieved without any intervention from the government, which is the main stakeholder in this industry. Therefore, the Irish government has been keen on providing the necessary incentives to promote research and development in this sector. This has been achieved through the provision of R&D tax credit on qualifying expenditures that are geared towards research and development.

How to Receive the R&D Tax Credit Incentive

In order to receive this incentive, any oil and or gas company has to submit a claim to the Irish Revenue together with the evidence to support that claim. In most cases, this evidence is in the form of scientific and or technical data which shows the breakdown of research costs in various components. Expenditures such as wages, purchase of machinery and equipment may be eligible. Upon approval, the Revenue will offer a cash refund guided by the 25% R&D tax credit as outlined in the Taxes Consolidation Act (TCA).  Some of the R&D activities that are eligible for this incentive within the oil and gas sector include:

  • Developing unique extraction methods such as fracturing technology;
  • Coming up with a new or improving the existing technology to minimize corrosion on oil pipelines;
  • Developing a technology to minimize the environmental degradation during oil mining;
  • Coming up with a software which will enhance the interpretation and performance of reservoirs at experimental sage;
  • Developing real-time troubleshooting software that will help in diagnosis of various machine problems especially when in a remote environment.

Are You Eligible for the R&D Tax Credit?

The above are just few examples of research and development activities that are eligible for the R&D tax incentive provided by the Irish government. To find out whether you are eligible, take our online eligibility quiz.

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