The 25% R&D Tax Credit
A cash-refundable incentive for qualifying research and development activities conducted within the European Economic Area (EEA).
Overview of the Scheme
The Irish R&D Tax Credit is one of the most competitive in the OECD. It provides a 25% tax credit on qualifying R&D expenditure. Crucially, if the company does not have a sufficient corporation tax liability to absorb the credit, the excess can be claimed as a cash refund over a three-year cycle.
What Qualifies as R&D?
To qualify, the activities must satisfy the statutory "Science test". They must:
- Involve systemic, investigative, or experimental activities.
- Be in a field of science or technology.
- Involve basic research, applied research, or experimental development.
- Seek to achieve scientific or technological advancement.
- Involve the resolution of scientific or technological uncertainty.
Qualifying Expenditure
Expenditure that can be included in the calculation includes:
- Direct Staff Costs: Salaries, wages, and certain bonuses for staff directly engaged in R&D.
- Materials: Materials used directly in the R&D process (not sold onward).
- Plant & Machinery: Capital expenditure on equipment used for R&D.
- Subcontractor Costs: Outsourced R&D costs can be claimed, subject to limits (generally up to 15% of the total qualifying internal R&D expenditure, or €100,000, whichever is greater).
Documentation is Critical
Revenue audits on R&D claims are rigorous. Companies must maintain contemporaneous records linking the specific expenditure directly to the qualifying scientific activities. Retroactive documentation is frequently rejected.
Calculate Your Potential Credit
Use our interactive estimator to project your R&D tax credit or cash refund based on planned expenditure.
Open the R&D Estimator