Revenue Note for Guidance

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Revenue Note for Guidance


Scientific and certain other research


This Chapter provides tax relief to persons carrying on a trade in respect of both revenue (sections 764 and 766) and capital (section 765) expenditure on scientific research.

763 Interpretation (sections 764 and 765)


The section contains definitions used in sections 764 and 765 as well as a number of other introductory provisions.



(1) Some of the more important definitions include —

designated area” is an area designated by order under section 2 of the Continental Shelf Act, 1968.

exploring for scientific minerals” is searching areas in the State, including searching by drilling, for deposits of specified minerals and includes testing such deposits and winning access to such deposits, but excludes mine development and mine working operations.

licence” covers an exploration licence, a petroleum prospecting licence, a petroleum lease and certain other licences referred to as reserved area licences.

petroleum” includes any mineral oil and natural gas and any other mineral substance contained in oil or natural gas obtained in the extraction process, but excludes coal and bituminous shales from which oil can be extracted by distillation. It is necessary for such substances to be extracted or to be capable of being extracted under the authority of a licence.

petroleum exploration activities” consists of searching for deposits in a licenced area and testing and assessing such deposits or in winning access to such deposits for the purpose of searching for, testing or assessing such deposits.

petroleum extraction activities” consists of searching for, winning access to and extracting petroleum from a relevant field under a petroleum lease authorising such activities and transporting the petroleum to an area for storage and initial treatment.

specified minerals” means certain minerals occurring in non-bedded deposits. The minerals in question are listed.

(2)expenditure on scientific research” excludes expenditure incurred in the acquisition of rights in connection with scientific research.

(2) to (4)scientific research” is any activities in the fields of natural or applied science for the extension of knowledge. However, specifically excluded are specified mineral and petroleum exploration activities as well as petroleum extraction activities carried on after 28 January, 1992.

Restriction on reliefs

(5) For the purposes of a deduction under section 764 or an allowance under section 765 expenditure incurred by a person must be on a net of grant basis.

(6) Expenditure can only be taken into account for the purposes of the reliefs under section 764 or 765 in respect of only one trade.

Relevant Date: Finance Act 2020