Your trusted adviser for R&D Tax Credits and R&D Grants
At 12.5%, it’s a well-known fact that corporation tax in Ireland is one of the lowest in the world. But there are also plenty of tax reliefs and incentives, especially for those who wish to invest in research and innovation.
Ireland is notorious for its vibrant culture, skilled workforce and conducive business environment. This is largely due to favourable tax incentives encouraging new businesses to start, grow and prosper on Irish soil, bolstering the economy.
The Digital Gaming Tax Credit is a tax incentive which gives game developers who have developed a qualifying digital game a refundable tax credit of up to 32% for their eligible expenditure, which they can claim annually, or once the game has been fully developed.
Eligible expenditures that can be claimed under this Digital Tax Credit scheme include:
For a game to qualify, it needs to:
Once issued a cultural certificate, game developers can claim this tax credit incentive within 12 months of accruing their eligible expenditures.
This incentive offers innovative Irish businesses that conduct R&D a 25% tax credit on all qualifying R&D expenditures–although, in the 2023 Budget, Revenue announced that this would increase to 30% for all 2024 qualifying expenditures. This is in addition to the standard 12.5% corporate tax deduction, resulting in a 37.5% tax benefit for qualifying R&D activities.
Businesses will only qualify for the R&D tax incentive if their R&D activities are:
Eligible businesses can receive their R&D tax credit as an offset against their corporate tax bill or cash repayments over 33 months if they qualify. Or, in some cases, they can be given to key employees.
Intellectual Property (IP) Regime: This incentive is designed to protect and manage intellectual property rights within Ireland. Companies can claim capital allowances of up to 80% on what they spend on the development, management, exploitation or sale of intangible assets such as patents, copyrights, trademarks, and know-how (usually referred to as intellectual property). Companies can claim their capital allowances within each accounting period, or they can claim them over a fixed write-down period of 15 years at 7% per year of qualifying expenditures and 2% of qualifying expenditures in the final year.
Knowledge Development Box (KDB): The KDB was first introduced in 2016 to encourage innovation and the development and exploitation of IP in Ireland. The incentive offers a 10% corporation tax relief on profits made by a qualifying patent, copyrighted software or other certified IP, as long as it was created through R&D activities.
To bring new business to Ireland and, therefore, more employment opportunities to boost the economy, the government offers Irish start-ups a tax relief known as Section 486C.
This incentive is a reduction in corporation tax liability for their first five years of trading, where the amount of corporation tax payable doesn’t go over €40,000 a year (although start-ups still get some marginal relief if the tax payable is between €40,000 and €60,000).
The reduction they get depends on the amount of PRSI (Pay Related Social Insurance) they pay in each accounting period because the incentive centres around creating employment opportunities.
A Section 110 company holds or manages ‘qualifying assets’ eligible for tax deductions.
‘Qualifying assets’ don’t include property assets such as land and buildings but do include a range of financial assets like shares, loans, leases, or bonds, as well as carbon offsets and mortgages.
The Section 110 tax incentive is a tax-neutral regime designed to boost Ireland's reputation as a location for securitisation transactions. Like standard Irish companies, a Section 110 company is taxed on all its business-related income, and deductions are allowed for expenses incurred to grow the business. But, a Section 110 company can also get a tax deduction for interest based on the company's results (like interest on profit, for example).
The Foreign Tax Credit incentive is designed to help companies avoid being doubly taxed on the income they make aboard and in Ireland. It has been designed to encourage international trade by reducing the tax burden on companies operating across borders.
If an Irish company earns income abroad and pays tax on that and the income they earn in Ireland, they could be eligible for foreign tax credits. To be eligible:
The Foreign Tax Credit scheme is notoriously complex, so it’s best to seek professional help before making a claim.
Companies in Ireland have plenty of opportunities to receive corporate tax relief to support their growth.
Get in touch with the experts at Myriad to talk through your options.
Myriad has been helping clients in all industries claim R&D tax credits for over 16 years. They understand the complexities surrounding submitting R&D tax credit applications and know exactly how to get you the maximum amount of R&D tax credits possible.
Firstly, our expert team of friendly R&D tax specialists will sit down with you and identify all costs that might be eligible for R&D tax credits. They then compile a detailed report explaining your R&D work and justifying your expenditure and submit it for review. Because they’ve been in the industry for so many years, Myriad have developed strong relationships with Revenue which means they usually have a higher success rate with all their claims.
At 12.5%, it’s a well-known fact that corporation tax in Ireland is one of the lowest in the world. But there are also plenty of tax reliefs and incentives, especially for those who wish to invest in research and innovation.
In a bid to establish themselves as a “global innovation leader, Irish government spending on R&D has reached record levels. But which industries are making the most out of this investment?
Starting a successful business is scary - but you’re not alone. To help you financially along the way, there’s a massive range of grants, loans, tax breaks and other funding available.
Please contact us to discuss how working with Myriad Associates can maximise and secure R&D funding opportunities for your business.
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info@myriadassociates.ie