Earlier this week, we welcomed the announcement of the increase of the R&D Tax Credit rate from 25% to 30% for micro and small companies as part of the budget for 2020. In addition to that, the Department of Finance has allocated €1 billion to the Department of Business, Enterprise and Innovation.
The Minister of Finance also introduced a new provision to allow micro and small companies to claim the R&D tax credit on qualifying pre-trading R&D expenditure before commencing to trade. While pre-trading, the credit will be limited to offset against VAT and payroll taxes. These measures will be introduced subject to State Aid approval.
Finally, another positive amendment was to the third – party (University and Third Level Institution) qualification limit. This is an increase from 5 percent to 15 percent. This may be of particular benefit to smaller companies who rely on outsourcing to undertake R&D, and it will also support R&D activities in the third level sector.
This is great news for companies employing up to 250 employees as it affords them the opportunity to avail of additional tax credit and in a quicker manner, this will subsequently improve their future budgeting and cash flow.
“With the increase in R&D Tax rates, Braithwaite Ireland envisions a boost in the Irish job creation”, said Ghazaleh Hashemian, COO. This move will undoubtedly be warmly welcomed by the numerous micro and small Irish companies who have been calling for this change for some time. “We look forward to assisting our clients with their future growth and innovation”.
To get in touch with the Braithwaite Ireland Team, specifically Ghazaleh Hashemian on all of the new changes to the 2020 budget, please contact her by email at firstname.lastname@example.org or by mobile at 353 086 792 7963.