How does the R&D regime work?
The research and development (R&D) regime provides for a tax credit or cash refund worth 25% of your R&D expenditure in respect of R&D activities incurred by a company within the charge to Irish tax operating in the EEA. For small and micro companies, as per Budget 2020, this is to increase to 30% of your R&D expenditure.
The credit or cash is in addition to any existing deduction or capital allowances for R&D expenditure, in other words, for every €100 spent on qualifying R&D activity (revenue or capital expenditure), a company could be entitled to €25 cash back which is in addition to the 12.5% corporate tax deduction. Therefore, up to 37.5% effective tax relief could be obtained for R&D expenditure, if it falls within the scope of this regime, equating to €37.50 for every €100 spent.
This coupled with the availability of grant support can help companies significantly reduce their cost of doing R&D in Ireland.
What EY can do for you
Our dedicated and multi-disciplinary R&D team has a proven track record of offering a uniquely integrated service to clients across a range of industry sectors by combining the skills of engineers, scientists, industry specialists and qualified tax advisors. We have a proven methodology for building robust R&D tax claims and helping clients maximise those claims. We also have an excellent track record on R&D Revenue audits, which is the envy of our peers.
Our tailored approach can include: