R&D Tax Credit on Life Sciences and Healthcare
Medical Industry: Leading Sector Across the Globe
The medical industry is the leading sector across the globe when it comes to innovation. It is believed that 8% of all sales from this industry are invested back into research and development, which has resulted in a new patent being filed every 50 minutes. This has resulted in an 18-24 month innovation cycle for medical devices, which means that a new product will become outdated within a period of less than two years.
Ireland: An Innovative Hub for Medical Devices
With this in mind, the government of Ireland has concentrated on strengthening the position of the country as an innovative hub for medical devices. The country has also highly focused on strengthening research on various medical areas such as nanotechnology, biomedical research and many others with an aim of creating the next generation of medical technology. In order to achieve this, the government has introduced R&D tax incentives in all Life Sciences and Healthcare sectors.
Expenditures On R&D
The R&D tax credit is specifically meant for expenditure on research and development activities including buildings and machinery which are used for research purposes. Salaries paid to the staff who contribute or take part in the innovative activities are also eligible for this tax credit. The main goal of this R&D tax credit is to encourage investment in research activities by both local and foreign firms operating in the country. This will facilitate Ireland’s competitiveness when it comes to innovation in the medical industry.
25% Refundable Tax Credit
The tax incentive provides a 25% refundable tax credit on expenditures that qualify as Research and Development (R&D). Upon realization of this expenditure, the company of concern should submit a claim to the Irish Revenue. Maintaining honesty and integrity in submitting the claim is very crucial and supporting documentation must be kept. This will help a company to avoid issues with the Revenue body in the case of an audit.