Research and Development tax credit

Bernard Doherty Bernard Doherty

Ireland’s R&D tax credit system is a major benefit to both multinational companies and SMEs operating in Ireland. The R&D tax credit was first introduced in Finance Act 2004 and offers a company undertaking R&D in Ireland a significant tax break, representing a potential 25% refund of costs incurred.

In order to utilise the R&D tax credit fully and optimally, it is important to ensure that all eligible costs are captured in the claim. Eligible R&D expenditure can come from a multitude of sources such as:

  • direct costs;
  • third party royalties;
  • indirect costs/ancillary activities;
  • plant and machinery;
  • payments to third party subcontractors and third level institutes; and
  • qualifying buildings/structures.