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R&D incentives explained

Ireland’s Research and Development Tax Credit is regarded as one of the best in the world and has been in place since 2004.

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Under the Irish system, companies can claim a tax credit of 25% on qualifying R&D expenditure. The purpose of the credit is to encourage both national and international companies to undertake R&D activities within Ireland.

R&D for Tax Purposes – Not Just Scientists in White Coats

The R&D tax relief schemes are remarkably inclusive, designed to be applicable across any sector. The definition of R&D for tax purposes is actually much broader than you might think. Simply explained, it’s quite likely that some of the challenges faced on your business projects on a day-to-day basis could qualify as eligible expenditure.

The rules and guidelines governing this niche area of tax are complex, but working with Ayming you can be assured that any qualifying activity will be identified thanks to our team’s in-depth understanding of these complexities, combined with their own industry-specific expertise. It’s this combination of tax and technical knowledge which is integral to maximising our clients’ R&D tax claims.

The Department of Business Enterprise & Innovation Ireland

Overview

The department develops, promotes and coordinates innovation, research and development policy, as well as influencing the European and International research agenda, allowing research and enterprise in Ireland.

It funds Enterprise Ireland, Science Foundation Ireland (SFI) and the Programme for Research in Third Level Institutions and develops intellectual property policy, prepares legislation and provides an intellectual property regime, reflecting international law environment & best practice.

Trade & Investment

The department drives the development and delivery of the enterprise development programmes of IDA Ireland and promotes the development of Ireland’s exports to world markets and work with Enterprise Ireland to help Irish companies achieve global success.

Support for Business

It provides a range of tailored support for enterprises of all sizes in Ireland, including access to finance, management development, mentoring supports, business development programmes, market support and trade promotion.

It also holds a structured dialogue with key stakeholders and advocates across Government to ensure the needs of SMEs are taken into account in the execution of national policy.

R&D for Tax Purposes

R&D tax relief schemes are extremely inclusive and have been specifically designed for applicability across all sectors. R&D for tax purposes is defined in quite a broad way – a simple summary is that it’s fairly likely that a number of day-to-day challenges you face in your business could be qualified as ‘eligible expenditure’.

This very niche area of tax is governed by complex guidelines, Ayming ensure that all qualifying activity is identified by our team of industry experts. By combining their knowledge of R&D tax incentives with their industry-specific experience, our team can fully optimise our clients’ R&D tax claims.

While Ireland’s R&D credit is available to both national and international companies, it is of great significance to multinational companies (MNCs) as accounting policies allow for the credit to be accounted for “above the line” in the profit and loss account. Such a treatment impacts on the unit cost of R&D which is a key measure for MNCs when considering a location for their R&D projects.

Furthermore, as the R&D expenditure is an allowable deduction when calculating taxable profits, a company can in effect avail of an overall relief of 37.5%.