Research & Development Tax Credit Ireland

Frequently Asked Questions

The Revenue Commissioners, which is the Irish tax authority, administers the R&D Tax Credit scheme in Ireland. Revenue state that companies must ensure that the R&D claim they submit, meets all the requirements before applying.

Eligible R&D activities include those aimed at achieving scientific or technological advancements
through the resolution of technical uncertainties.

The Research and Development (R&D) Tax Credit is a tax incentive provided by Revenue to
encourage businesses to innovate by investing in research and development activities. It is designed
to promote scientific and technological advancement by allowing eligible companies to get a portion
of their R&D expenditures back in cash/tax refunds.

R&D Tax Credits are not typically considered taxable income for the company receiving them. They are designed to reduce the company's tax liability or boost their cashflow.
Companies engaged in qualifying research and development activities can identify eligible expenses related to those activities, such as wages, consumables, overheads, machinery and subcontractors These expenses are then used to calculate the R&D Tax Credit, which is 25% of those eligible expenses. The credit is then applied to either reduce the company's tax liability or to take as a cash refund.
Any company in any industry that engages in activities aimed at scientific or technological innovation, process improvement, and the development of new products or technologies are eligible. Eligibility may depend on factors such as the nature of the research, the novelty of the technology, and the associated costs to determine if it meets the criteria set out by Revenue.
Yes, there is a minimum expenditure threshold of €25,000 to qualify for the R&D Tax Credit in Ireland.
Yes, both startups and small businesses can benefit from the R&D Tax Credit scheme in Ireland, provided they meet the eligibility criteria. In fact, contrary to popular belief both loss-making and profit-making companies can both avail of R&D Tax Credits.
Yes, eligible companies in Ireland can use the R&D Tax Credit to offset their liability for payroll taxes like PRSI (Pay-Related Social Insurance) and PAYE (Pay as You Earn).
To make a claim, companies need to provide technical and financial documentation demonstrating the nature and costs of their qualifying R&D projects. They must also maintain Payroll, Timesheets, Invoices, and internal reports relating to the claim.
Remember that the regulations change, so it’s always recommended to consult with tax professionals like Braithwaite for the most up-to-date and accurate information regarding R&D Tax Credits.

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