The Irish Taxation Institute (ITI) has called on Minister for Finance Brian Cowen to introduce tax relief on all corporate research and development (R&D) expenditure.

ITI president Joan O'Connor said that Ireland would continue to lose out to other EU states on R&D investment unless there was a move away from the traditional understanding of R&D.

In a pre-budget submission to Mr Cowen she said that R&D was not solely about "petri dishes and white coats".

"Innovation comes in many different forms and the lack of awareness of this fact is hurting our ability to benefit from R&D investment," she said.

Currently, if a company spends €10 million on R&D in one year and €15 million the next, it can only claim tax relief at a rate of 20 per cent on the increase (€5 million). The ITI wants tax relief on all R&D spending.

Ms O'Connor said that the UK offered as much as 30 per cent tax relief on all R&D spending.

"The current incremental-based system, where companies get tax credits on some but not all R&D spend, is forcing investors to look elsewhere," she said.