What is an R&D Tax Credit?
The R&D Tax Credit is a valuable tax-based incentive that is designed to encourage investment in R&D by companies in Ireland. The Tax credit operates by giving you up to 25 percent of your R&D expenditure (both revenue and capital) in a tax credit or in cash (subject to certain conditions being met). The 25 percent credit is available in addition to the 12.5 percent corporation tax deduction at the standard rate. The relief is generally available for R&D activities carried out in a wide variety of science and technology areas such as software development, engineering, food and beverage production, medical devices, pharmaceuticals, financial services, agriculture and horticulture.
KDA ACCOUNTANTS FOLLOW A 4-STEP PROCESS DURING OUR TAX CREDIT CLAIM SERVICE:
When a company does not have profits to set the credits off against, then the company may make a claim to Revenue to have the excess credit refunded in instalments. These instalments are paid over a period of 33 months from the end of the accounting period in which the expenditure is incurred. The refund is limited to the corporation tax paid over the previous 10 years, or the total of the employers PRSI paid and income taxes paid by the employees of the company for the current year. Where a refund is not available the excess can still be carried forward against corporation tax for future accounting periods.
EXAMPLE OF QUALIFYING ACTIVITIES:
HOW CAN WE HELP?
If your company is carrying out any of the above activities, and you are interested in discussing if your activities could be eligible for the valuable R&D tax credit, KDA Accountants can help. We would be happy to arrange an initial eligibility assessment of your activities, at no cost to you.