Research & Development Tax Credits

What tax credits are available for R&D in Ireland?

The Irish research and development (R&D) tax regime provides a 25% credit for qualifying expenditure on qualifying activities. This means that companies can now obtain an effective tax deduction on up to 37.5% with the possibility of the value of the R&D tax credit being refunded where there is not a sufficient level of taxable profits within the company/group.

Consider how much money your business spends when trying to develop or improve its products or processes. Now imagine you could reduce that by 25%!

Features of the Irish R&D tax regime

Companies are entitled to a credit of 25% of the incremental R&D expenditure incurred in excess of the base year spend. The base year is 2003. If a company commences R&D activities after 2003 then the base year spend will be nil.

The credit can be used to:

– Reduce the company’s corporation tax liability of the period
– Reduce the corporation tax liability of the previous year, or
– If unused, the credit can be refunded by the tax authorities subject to certain restrictions.

The credit is in addition to the normal corporation tax deduction for the expenditure.

The claim must be made within 1 year of the end of the accounting period in which the expenditure has been incurred.

How BDO can help

BDO will facilitate the following:

– Identification of eligible R&D activities.
– Identification of qualifying R&D expenditure.
– Drafting of technical reports.
– Drafting of financial reports.
– Preparation of claim to Revenue Commissioners.

If you would like more information on the R&D tax credits which may be available to your company then please contact Feargal Kenzie on 061 214253 or email fkenzie@bdo.ie

Key Contacts

Denis Herlihy

Tel: +353 61 414 455
Email: dherlihy@bdo.ie

Paul Nestor

Tel: +353 61 414 455
Email: pnestor@bdo.ie

Pat Sheehan

Tel: +353 61 414 455
Email: psheehan@bdo.ie

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BDO is a firm of registered auditors and is registered to carry on audit work in Ireland and the UK by the Institute of Chartered Accountants in Ireland. Details about our audit registration can be viewed at www.auditregister.org.uk under reference number 223876. BDO is also authorised to carry on investment business in the Republic of Ireland by the Institute of Chartered Accountants in Ireland.