{"id":16373,"date":"2025-05-22T16:19:41","date_gmt":"2025-05-22T15:19:41","guid":{"rendered":"https:\/\/www.sage.com\/en-ie\/blog\/?p=16373"},"modified":"2026-01-13T16:28:41","modified_gmt":"2026-01-13T16:28:41","slug":"r-d-tax-credit-ireland","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-ie\/blog\/r-d-tax-credit-ireland\/","title":{"rendered":"R&amp;D tax credit in Ireland: What it is and how to apply"},"content":{"rendered":"<header class=\"entry-header has-dark-background-color entry-header--has-illustration entry-header--has-illustration--generic\">\n\t<div class=\"container\">\n\t\t<div class=\"entry-header__row row align-center\">\n\t\t\t<div class=\"col col-lg-7 col-xlg-6 entry-header__content\">\n\t\t\t\t\t\t\t<div class=\"component component-single-header\">\n\t\t\t\t\t\t\t\t\t\t<div class=\"entry-header__misc text--subtitle text--uppercase text--small\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-ie\/blog\/category\/money-matters\/\" class=\"entry-header__link\">Money Matters<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t<div class=\"entry-title-wrapper\">\n\t\t\t\t\t<h1 class=\"entry-title\">\n\t\t\t\t\t\tR&amp;D tax credit in Ireland: What it is and how to apply\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t<p class=\"entry-header__description\">\n\t\t\t\t\t\t\t\t\t\t\t<\/p>\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t<div class=\"single-post-details container\">\n\t\t<div class=\"col\">\n\t\t\t<span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2025-05-22T16:19:41+01:00\">22 May, 2025<\/time><\/span><span class=\"reading-time\"> min read<\/span>\n\t\t<button\n\t\t\ttype=\"button\"\n\t\t\tclass=\"social-share-button button button--icon button--secondary js-social-share-button\"\n\t\t\tdata-share-title=\"R&amp;D tax credit in Ireland: What it is and how to apply\"\n\t\t\tdata-share-url=\"https:\/\/www.sage.com\/en-ie\/blog\/r-d-tax-credit-ireland\/\"\n\t\t\tdata-share-text=\"Please read this interesting article\"\n\t\t>\n\t\t\t<span class=\"social-share-button__share-label\">Share<\/span>\n\t\t\t<span class=\"social-share-button__copy-label\" hidden>Copy Link<\/span>\n\t\t\t<span class=\"social-share-button__copy-tooltip\" aria-hidden=\"true\" hidden>Copied<\/span>\n\t\t<\/button>\n\n\t\t\t\t<\/div>\n\t<\/div>\n<\/header>\n\n\n\n<div class=\"wp-block-post-author has-dark-background-color alignfull\">\n\t<div class=\"container\">\n\t\t<div class=\"col\">\n\t\t\t\t\t\t\t<div class=\"co-authors\">\n\t\t\t\t\t\n\t\t<div class=\"entry-author-wrapper\">\n\t\t\t<a class=\"entry-author\" href=\"https:\/\/www.sage.com\/en-ie\/blog\/author\/roisinkilleen\/\">\n\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"40\" height=\"40\" src=\"https:\/\/www.sage.com\/en-ie\/blog\/wp-content\/uploads\/sites\/13\/2019\/10\/Roisin-Killeen.jpg\" class=\"entry-author__image\" alt=\"Roisin Killeen\" \/>\t\t\t\t<span class=\"entry-author__name\">R\u00f3is\u00edn Killeen<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n\n\n<p>During a time of global economic uncertainty and what has been described as an existential threat to the Irish economy, research and innovation is even more important to remain competitive.<\/p>\n\n\n\n<p>And one way Ireland looks to encourage innovation is through the R&amp;D tax credit. <\/p>\n\n\n\n<p>This tax credit, which was first introduced in 2004, is available to companies that pay Irish corporation tax and undertake research and development (R&amp;D) activities in the European Economic Area (EEA) or the UK.<\/p>\n\n\n\n<p>This article outlines what is involved and covers:<\/p>\n\n\n<?xml encoding=\"utf-8\" ?><div class=\"wp-block-yoast-seo-table-of-contents yoast-table-of-contents\"><ul><li><a href=\"#h-what-is-the-r-amp-d-tax-credit-and-how-does-it-work\" data-level=\"2\">What is the R&amp;D tax credit and how does it work?<\/a><\/li><li><a href=\"#h-recent-changes-to-the-tax-credit\" data-level=\"2\">Recent changes to the tax credit<\/a><\/li><li><a href=\"#h-qualifying-r-amp-d-activities\" data-level=\"2\">Qualifying R&amp;D activities<\/a><\/li><li><a href=\"#h-how-to-claim\" data-level=\"2\">How to claim<\/a><\/li><li><a href=\"#h-top-tips-on-applying-for-the-r-amp-d-tax-credit\" data-level=\"2\">Top tips on applying for the R&amp;D tax credit<\/a><\/li><li><a href=\"#h-what-type-of-documentation-should-you-keep\" data-level=\"2\">What type of documentation should you keep?<\/a><\/li><li><a href=\"#h-how-does-ireland-compare-with-other-countries\" data-level=\"2\">How does Ireland compare with other countries?<\/a><\/li><\/ul><\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-is-the-r-amp-d-tax-credit-and-how-does-it-work\">What is the R&amp;D tax credit and how does it work?<\/h2>\n\n\n\n<p>Below are key facts in relation to the tax credit:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>A crucial point in relation to the tax credit is that there is no requirement for the R&amp;D activities to be successful. The activity must seek to achieve, as opposed to succeed in achieving.<\/li>\n\n\n\n<li>The tax credit is worth up to 30% of qualifying expenditure. This credit is in addition to the normal 12.5% revenue deduction available for R&amp;D expenditure, thereby resulting in a benefit of 42.5%.<\/li>\n\n\n\n<li>Eligible expenditure can include expenses (such as salaries, materials consumed, overheads, etc) that are deductible for the purposes of computing corporation tax.<\/li>\n\n\n\n<li>Expenditure incurred on plant and machinery (P&amp;M) can be classed as qualifying R&amp;D spend. In order to qualify, P&amp;M must be eligible for wear and tear capital allowances and must be used for the purposes of undertaking R&amp;D activities.<\/li>\n\n\n\n<li>Expenditure on construction or refurbishment of a building used for qualifying R&amp;D activity may also be classed as qualifying R&amp;D spend. The credit is available for expenditure provided a number of conditions are met.<\/li>\n\n\n\n<li>The tax credit is a fully payable credit that is paid in three fixed instalments. Since January 2025, the first instalment is the greater of \u20ac75,000 (or the amount of the R&amp;D corporation tax credit claimed, if lower) or 50% of the amount of the R&amp;D tax credit. The second instalment is three-fifths of the balance and the third instalment is the remaining balance.<\/li>\n\n\n\n<li>Revenue has four years from the end of the year in which the claim is made to carry out an audit.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-recent-changes-to-the-tax-credit\">Recent changes to the tax credit<\/h2>\n\n\n\n<p>For R&amp;D completed after 1 January 2024, the credit increased from 25% to 30%.<\/p>\n\n\n\n<p>Also, in <a href=\"https:\/\/www.sage.com\/en-ie\/blog\/what-budget-2025-means-for-your-business\/\">Budget 2025<\/a>, for accounting periods starting after 1 January 2025, Revenue increased the amount of credit that can be claimed in the first instalment, from \u20ac50,000 to \u20ac75,000. <\/p>\n\n\n\n<p>This change is designed to provide quicker access to funding for companies engaging in smaller R&amp;D projects.<\/p>\n\n\n\n<p>In addition, since 1 January 2024, if you&#8217;re claiming the credit for the first time, you must notify Revenue at least 90 days before making the claim. <\/p>\n\n\n\n<p>This requirement also applies to companies that have not claimed the credit in the previous three years.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-qualifying-r-amp-d-activities\">Qualifying R&amp;D activities<\/h2>\n\n\n\n<p>To qualify, your company&#8217;s R&amp;D activities must:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Involve systematic, investigative or experimental activities<\/li>\n\n\n\n<li>Be in the field of science or technology (this has to be Revenue-approved)<\/li>\n\n\n\n<li>Involve one or more of these categories of R&amp;D:\n<ul class=\"wp-block-list\">\n<li>Basic research<\/li>\n\n\n\n<li>Applied research<\/li>\n\n\n\n<li>Experimental development<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Seek to make scientific or technological advancement<\/li>\n\n\n\n<li>Involve the resolution of scientific or technological uncertainty.<\/li>\n<\/ul>\n\n\n\n<p>Industries carrying out R&amp;D can include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Pharmaceuticals<\/li>\n\n\n\n<li>Medical devices<\/li>\n\n\n\n<li>Software development<\/li>\n\n\n\n<li>Fintech<\/li>\n\n\n\n<li>Heavy and light engineering<\/li>\n\n\n\n<li>Food and drink production.<\/li>\n<\/ul>\n\n\n\n<p>&#8220;Qualifying R&amp;D activities are vaguely described, in order to be widely accessible to many different industries,&#8221; explains Barrie Dowsett, who is CEO of <a href=\"https:\/\/www.myriadassociates.ie\/\" rel=\"noopener noreferrer\">Myriad<\/a>, which specialises in offering advice on the R&amp;D tax credit, along with R&amp;D grants, and has an office in Dublin, as well as London and Paris.<\/p>\n\n\n\n<p>Barrie points out that eligible R&amp;D projects are not limited to lab research, and cutting-edge innovations and technological advancements can simply be appreciable improvements to products, processes or increased capability and knowledge in software.<\/p>\n\n\n\n<p>And he believes many businesses don&#8217;t realise they&#8217;re undertaking eligible qualifying activities and could be missing out.<\/p>\n\n\n\n<p>He says, &#8220;If your technical lead [the R&amp;D manager, lead engineer, or lead developer, for example] is struggling to overcome the feasibility challenges of your project, then your project will almost certainly qualify for the R&amp;D tax credit.&#8221;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-to-claim\">How to claim<\/h2>\n\n\n\n<p>Claims are processed by Revenue as part of your corporation tax return and you must use Revenue Online Service (ROS) to claim your credit.<\/p>\n\n\n\n<p>Claims must be made within 12 months from the end of the accounting period in which the expenditure is incurred.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-top-tips-on-applying-for-the-r-amp-d-tax-credit\">Top tips on applying for the R&amp;D tax credit<\/h2>\n\n\n\n<p>Applying can be complex, especially for an SME, which doesn&#8217;t have the same resources as a large multinational.<\/p>\n\n\n\n<p>Barrie says, &#8220;The process is complicated; many claimants are caught out by waiting too long to start their claim and not having enough time to make a well-considered, robust claim. <\/p>\n\n\n\n<p>&#8220;An R&amp;D tax credit claim is unlikely to be completed in a day.&#8221;<\/p>\n\n\n\n<p>You must also ensure that you have all the correct documentation in terms of both the science aspect and the finance aspect.<\/p>\n\n\n\n<p>Barrie adds, &#8220;Ensuring that your projects are qualifying and your costs are eligible requires significant know-how, especially since these two aspects of the claim are usually carried out by separate teams [i.e. technical team and finance team].<\/p>\n\n\n\n<p>&#8220;Cohesion between these teams is crucial to make sure you don&#8217;t leave any eligible costs on the table.&#8221;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-type-of-documentation-should-you-keep\">What type of documentation should you keep?<\/h2>\n\n\n\n<p>Barrie outlines the types of documentation you should keep:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-1-project-logs\">1. Project logs<\/h3>\n\n\n\n<p>Regularly updated logs that track progress and critical milestones, outlining the challenges encountered and the steps taken to resolve them.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-2-staff-participation-records\">2. Staff participation records<\/h3>\n\n\n\n<p>Evidence of the time each employee spent on R&amp;D activities. This is usually done via timesheets.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-3-internal-communications\">3. Internal communications<\/h3>\n\n\n\n<p>Emails between the team, and correspondence with any subcontractors or agency staff, can help demonstrate what work was done and when.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-4-contracts-and-invoices\">4. Contracts and invoices<\/h3>\n\n\n\n<p>This is crucial to demonstrate that costs were incurred and paid.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-does-ireland-compare-with-other-countries\">How does Ireland compare with other countries?<\/h2>\n\n\n\n<p>The tax credit rate of 30% compares well with many other economies. The net benefit in the UK, for instance, is only 15%.<\/p>\n\n\n\n<p>However, though Ireland&#8217;s 30% rate is generous, its total spend on research and development as a percentage of gross domestic product (GDP) is well below the European Union (EU) average, at <a href=\"https:\/\/economy-finance.ec.europa.eu\/document\/download\/9f14e528-de10-41aa-8b4d-01c5848784c8_en?filename=SWD_2024_607_1_EN_Ireland.pdf\" rel=\"noopener noreferrer\">0.96%<\/a> in 2022, compared with the EU average of 2.2%.<\/p>\n\n\n\n<p>But the figure is more positive if you use gross national income (GNI), which excludes distortions from foreign-owned firms. With this calculation, Ireland&#8217;s R&amp;D expenditure as a percentage of GNI in 2022 was significantly higher at 1.78%.<\/p>\n\n\n\n<p>Revenue&#8217;s <a href=\"https:\/\/www.revenue.ie\/en\/corporate\/documents\/statistics\/tax-expenditures\/r-and-d-tax-credit-statistics.pdf\" rel=\"noopener noreferrer\">statistics<\/a> on the uptake for the 10-year period up to 2022 shows that about 1,600 companies are making claims each year.<\/p>\n\n\n\n<p>Barrie says, &#8220;The vast majority of claims are made by small and medium-sized companies. in 2022, 1,444 companies were SMEs and the remaining 187 were large companies.<\/p>\n\n\n\n<p>&#8220;However, in terms of expenditure, \u20ac888 million in expenditure was claimed by smaller companies compared to a staggering \u20ac3.8 billion claimed by large corporations, despite the much smaller number of large companies claiming.&#8221;<\/p>\n\n\n\n<p>He thinks this shows that work needs to be done to make it easier for SMEs to avail of the tax credit.<\/p>\n\n\n\n<p>&#8220;The largest slice of the pie is claimed by huge multinationals,&#8221; adds Barrie. &#8220;SMEs are often discouraged from claiming the tax credit due to the complexity of the scheme or concerns about a Revenue audit.&#8221;<\/p>\n\n\n\n<p>Also, he feels that while the increase in the initial amount of cash paid out from \u20ac50,000 to \u20ac75,000 is positive, the pre-claim notification for first-time claimants and those who have not claimed in the last three years is adding more hurdles to an already complex scheme.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Final thoughts<\/h2>\n\n\n\n<p>To keep its competitive edge, Ireland needs to up its investment in R&amp;D. <\/p>\n\n\n\n<p>Though it may be tempting to defer investment during a time of global upheaval, now is not the time to stand still.<\/p>\n\n\n\n<p>While the R&amp;D tax credit is only part of the equation, they will help to increase Ireland&#8217;s long-term competitiveness and the government needs to continue to facilitate companies, and particularly SMEs, to avail of the tax credit.<\/p>\n\n\n\n\n\n<div class=\"single-cta\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Subscribe to the Sage Advice newsletter<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p>Join 1.5 million subscribers and get the best business admin strategies and tactics, as well as actionable advice to help your company thrive, in your inbox every month.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-53abbdcc-410c-4c8c-bf97-ca5c6982eebd\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Subscribe now<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"999\" height=\"666\" src=\"https:\/\/www.sage.com\/en-ie\/blog\/wp-content\/uploads\/sites\/13\/2021\/04\/z.5E3A0481_All-Uses.jpg\" class=\"single-cta__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-ie\/blog\/wp-content\/uploads\/sites\/13\/2021\/04\/z.5E3A0481_All-Uses.jpg 999w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Could your business be eligible for the R&#038;D tax credit? Discover what&#8217;s involved and learn what&#8217;s required for a successful application.<\/p>\n","protected":false},"author":912,"featured_media":14515,"menu_order":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_sage_video":false,"post_featured_image_hide":false,"footnotes":""},"categories":[163],"tags":[107,128,130],"business_type":[5,4],"lilypad":[],"context":[],"industry":[],"persona":[211,232],"imagine_tag":[212,230],"coauthors":[386],"class_list":["post-16373","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-money-matters","tag-business-finances","tag-government-funding","tag-grow-business","business_type-small-business","business_type-medium-sized-business"],"sage_meta":{"region":"en-ie","author_name":"R\u00f3is\u00edn Killeen","featured_image":"https:\/\/www.sage.com\/en-ie\/blog\/wp-content\/uploads\/sites\/13\/2023\/09\/GettyImages-1451456915.jpg","imagine_tags":{"212":"Mid-sized business","230":"Small business"}},"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"Sage Advice Ireland","distributor_original_site_url":"https:\/\/www.sage.com\/en-ie\/blog","push-errors":false,"_links":{"self":[{"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/posts\/16373","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/users\/912"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/comments?post=16373"}],"version-history":[{"count":0,"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/posts\/16373\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/media\/14515"}],"wp:attachment":[{"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/media?parent=16373"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/categories?post=16373"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/tags?post=16373"},{"taxonomy":"business_type","embeddable":true,"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/business_type?post=16373"},{"taxonomy":"lilypad","embeddable":true,"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/lilypad?post=16373"},{"taxonomy":"context","embeddable":true,"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/context?post=16373"},{"taxonomy":"industry","embeddable":true,"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/industry?post=16373"},{"taxonomy":"persona","embeddable":true,"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/persona?post=16373"},{"taxonomy":"imagine_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/imagine_tag?post=16373"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/coauthors?post=16373"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}