R&D Corporation Tax Credit

Expenditure incurred by a company on Research and Development (R&D) activities may qualify for either the:

• R&D Tax Credit
• or
• R&D Corporation Tax Credit.

Both are calculated at 25% of qualifying expenditure. For accounting periods commencing on or after 1 January 2024, the rate has increased to 30%.

Subject to meeting certain conditions, a company may elect to claim the R&D Tax Credit or the R&D Corporation Tax Credit during a transitional period. In general, the transitional period applies in respect of accounting periods ending between 31 December 2022 and 30 December 2023.

A company may elect to accelerate repayable credits due in respect of an R&D Tax Credit claim made in accounting periods commencing before 1 January 2022. A claim to accelerate the payments may be made in a specified return for an accounting period commencing on, or after, 1 January 2022.

A claim for the R&D Corporation Tax Credit is required to be made in respect of accounting periods commencing on, or after, 1 January 2023. The R&D Corporation Tax Credit will be repaid in three annual instalments.

The R&D Corporation Tax Credit is not offset against the company’s Corporation Tax (CT) liabilities. The company must elect to have the instalment treated as an overpayment, for offset against tax liabilities, or repaid.

Qualifying criteria

A company may qualify for the R&D Tax Credit or R&D Corporation Tax Credit if:

• it is within the charge of Corporation Tax in Ireland
• it carries out qualifying R&D activities in Ireland, the European Economic Area (EEA) or the United Kingdom (UK)
• and
• the expenditure does not qualify for a tax deduction in another country.

Qualifying R&D activities

To qualify for the R&D Tax Credit, a company’s R&D activities must:

• involve systematic, investigative or experimental activities
• be in the field of science or technology
• involve one, or more, of these categories of R&D:
  • basic research
  • applied research
  • experimental development
• seek to make scientific or technological advancement
• and
• involve the resolution of scientific or technological uncertainty.

For more information on the R&D activites that qualify for the R&D Tax Credit, please see Tax and Duty Manual Part 29-02-03.

Pre-Filing Notification Requirement

For accounting periods beginning on or after 1 January 2024, companies claiming the credit for the first time must notify Revenue before making their claim. This requirement also applies to companies which have not claimed the credit in the previous three years. Companies must file a pre-filing notification form at least 90 days before the claim for the credit is made.

If a company has made a claim for the R&D Corporation Tax Credit or the R&D Tax Credit in any of the three preceding years, they will not have to complete the pre-filing notification.

The pre-filing notification form must be filed through MyEnquiries via ROS. To file the pre-filing notification form, click on MyEnquiries and select:

• the category ‘Corporation Tax (CT)’
• and
• the subcategory ‘R&D Pre-filing Notification’.

How to claim

A company must use Revenue Online Service (ROS) to claim either credit on their Corporation Tax Return.

The company must ensure that the R&D claim meets all the requirements before applying.

Claims must be made within 12 months from the end of the accounting period in which the expenditure is incurred.

Revenue's Research and Development Corporation Tax Guidelines

For further information, please see Tax and Duty Manual Part 29-02-03.