What is the R&D Tax Credit Programme?
- An opportunity to return 25% (30% applied to Micro and Small Companies as of January 2020) of your Research and Development expenditure in a tax credit or as a cash refund. The R&D Tax Credit Programme was introduced in 2004 to encourage Irish-based companies to perform R&D and to promote investment in innovation.
What type of R&D activities are eligible?
- There is a misconception that Research and Development can only take place when you have a dedicated team and/or lab facility – the idea of “men/women in white lab coats”. In reality, many of the companies that are taking advantage of the programme have qualifying R&D expenditure because a portion of their operations is dedicated to innovation. The expenditure used to enhance, improve and/or advance a product or service could be claimable – even if the project was not successful. Learn more about the claimable areas here.
What type of expenditure is claimable?
- Expenditures can include wages, third-party contractor cost (contractor performing R&D in European Economic Area (EEA)), materials, machinery, equipment, and overheads. The credit is claimed on qualifying expenditure in respect to the amount spent on R&D activities in the fiscal accounting year.
Who can take advantage of the programme?
- The credit is available to Irish-based companies for R&D activities carried out in a wide variety of science and technology areas such as information technology development, engineering, medical devices, pharmaceuticals, agriculture, and food processing.
Does the opportunity expire?
- Yes, the opportunity expires 12 months from the end of your fiscal year. So for example, if your year-end is December 31 you have until December 31, 2018, to submit a claim for your 2017 fiscal year. Braithwaite recommends not waiting to file before the deadline. Aim to file your claim with your CT1 and not as an amendment. Learn more about filing the claim in your CT1 here and how to plan for it here.