Relief for investment in innovative enterprise

Requirements for certification (company)

A company making an application must:

• be incorporated in the State, another European Economic Area (EEA) or the United Kingdom (UK)
• be tax resident in the State, EEA state or the UK
• hold a current valid Tax Clearance Certificate
• cannot control any company that is not a qualifying subsidiary
• and
• cannot be under the control of any other company, or of any other company and any person connected with that other company.

The company making the application, or its qualifying subsidiary, must:

• carry on, or intend to carry on, relevant trading activities from a fixed place in the State
• exist wholly for the purpose of carrying on relevant trading activities
• be an innovative business
• and
• have a business plan which it has the expertise and experience to implement.

What is a qualifying subsidiary?

A qualifying subsidiary is a company that must:

• be tax resident in the State, another EEA state or the UK, and carry on, or intend to carry on, relevant trading activities from a fixed place in the State
• hold a current valid Tax Clearance Certificate
• be at least 51% owned by:
  • the company making an application for the Certificates of Qualification
  • or
  • the qualifying company
• and
• not be under the control of any other person.

There can be no arrangements in place that would cause the ownership, and the control requirement, to cease to be satisfied.

Innovative business

The company must demonstrate that it is an innovative enterprise within the meaning of the General Block Exemption Regulations (GBERs). A company, or its qualifying subsidiary, will be considered an innovative enterprise if:

• it has been awarded certain specified awards or grants within three years of the application
• its research and development costs meet the minimum requirement
• or
• for a start-up with no financial history, an external auditor can certify the requirements for the current year.

Where these requirements are not met, the company may make a submission as part of the application. The submission must demonstrate that the company will develop products, services or processes:

• which are new or substantially improved compared to the state of the art in its industry
• and
• which carry a risk of technological or industrial failure. 

The company may be considered an innovative enterprise based on this submission.  Revenue may consult Enterprise Ireland on the application. In certain cases, Enterprise Ireland may engage technical or financial experts to advise on the evaluation.

Further details can be found in the Tax and Duty Manual, The Relief for Investment in Innovative Enterprises.

Business plan

A company, or its qualifying subsidiary, must have a viable business plan. This plan must show:

• how the funding raised will be used
• that the investment will be financially viable
• and
• that company has the required expertise and experience to implement the plan.

The plan should include details such as:

• the development of the product
• the development of the sales
• the profitability development
• and
• cashflow projections.

Next: Requirements for certification (relief group)