Ireland as a Location for Your Company’s R&D

Ireland: Explore the R&D Advantages

Ireland offers numerous advantages for companies that seek to undertake their R&D in Ireland.

Obtaining Tax Relief Up to 37.5%

There are two major incentives that are granted to companies that incur expenditures on R&D activities. A firm that incurs expenditure on R&D may avail for a tax credit of 25% on all R&D expenditure incurred on or after 1 January 2015. The R&D incentive reduces the corporate tax liability of a firm and is in addition to the corporation tax deduction available at 12.5% for qualifying expenditure. Through this, the combined effect of these provisions enables a firm to obtain tax relief at an effective rate of up to 37.5% of R&D expenditure.

Tax Credits for Buildings/Structures Used for R&D

The Irish tax legislation also allows for a tax credit for capital expenditure on buildings or structures that are used for the purpose of carrying out the R&D activities. It is worth noting that expenditure in this context also refers to spending on the construction or refurbishment of a building or structure to be used to facilitate R&D. In this case, the tax credit will amount to 25% of the cost of the construction/refurbishment. Moreover, it is available on a proportional basis if 35% or more of the building is being used for R&D facilities.

10-Year Claw Back Clause

The full R&D credit of 25% may be claimed in the year in which the expenditure was incurred. However, a 10-year claw back clause exists in the event that the building or structure is sold or is no longer used by the company for the purposes of R&D.

If you would like to learn more about the R&D tax credit in Ireland, contact Swanson Reed R&D Tax Advisors today.

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