R&D Tax Credits
What is R&D Tax Credit?
R&D Tax Credit is an Irish Revenue initiative open to all companies that undertake qualifying research & development activities. Qualifying companies are entitled to 25% tax credit for offset against corporate taxes in addition to the deduction of 12.5% corporation tax. Therefore, companies undertaking qualifying R&D can claim a refund from the Revenue of €37.50 for every €100 worth of R&D expenditure. The R&D tax credit reduces the real cost of R&D by up to 37.5%.
Who is R&D Tax Credit for?
R&D Tax Credit is for any company that is carrying out qualifying R&D activities, i.e. the R&D must
- Involve systemic, investigative or experimental activities;
- Be in the field of science or technology;
- Involve one or more of the following categories of R&D – basic research, applied research or experimental development;
- Attempt to make a technological or scientific advancement; and
- Involve the resolution of scientific or technological uncertainty.
Important points to note are that companies claiming the R&D tax credit do not need to hold the intellectual property rights resulting from the R&D work. Also, the R&D work does not have to be successful, hence the project may fail.
What’s in it for you?
My experience in R&D Credit Claims & Audits can help you with a successful application & claim. In addition to the reduction of Tax Credits, R&D Tax Credit application can also result in Cash Refunds, i.e. forgotten or hidden revenue streams. If a company does not have a tax liability it may claim a repayment of Cash, this will be paid in 3 equal installments over a 3 year period. The Cash Repayment is capped to the prior year total payroll liability. All remaining tax credit can be carried forward indefinitely, as a tax credit against future profits or cash refund. Tax credits can help your organisation advance to the next level.