Ireland’s R&D tax credit is 35% of qualifying expenditure for most accounting periods ending 31 December 2026 or later. The previous rate was 30%. Your accounting period determines which applies; the exact test is below. New products do not automatically qualify, and a credit is not cash already in the bank. Check eligibility, evidence, notification and payment timing before spending against it.
The credit can be valuable. It can also become a funding assumption that your business cannot afford to get wrong.
We’ve seen claims still under review six months or more after filing. The credit was fine in the end. The cash was not there when the business expected it. Do not treat an expected credit as a confirmed receipt date.
Your technical assessment, cost records, Corporation Tax return and cash forecast need to agree. A percentage in a pitch deck will not do that work for you.
What is the R&D tax credit?
It is a Corporation Tax credit for eligible companies undertaking qualifying research and development. The company must be within the Irish tax charge and carry out the qualifying activity in the EEA or the UK. For an Irish-resident company, the expenditure must not qualify for a tax deduction in another territory. Revenue’s qualifying criteria explain the conditions.
It is separate from the ordinary tax deduction for qualifying business expenditure. Do not describe the combined effect as an automatic cash refund of a fixed percentage: the tax deduction and the credit have different conditions and consequences.
R&D tax credit rates in Ireland
The accounting period determines the rate. The date you send the claim does not let you choose a newer rate for an older period.
| Accounting period | Credit rate |
|---|---|
| Begins on or after 1 January 2024, before the 35% regime applies | 30% |
| Specified return date on or after 23 September 2027, generally ending 31 December 2026 or later | 35% |
The 35% commencement rule is set out in Finance Act 2025, section 35. It is not a blanket rule for every period starting in 2026.
For an illustration, €400,000 of qualifying expenditure in a 12-month period ending 31 December 2026 produces a €140,000 credit at 35%. The same qualifying expenditure in a 12-month period ending 31 December 2025 produces €120,000 at 30%. Eligibility is assumed for these calculations; this is not a client case.
Does your technology work qualify?
Building something new to your business is not enough. Revenue requires systematic investigative or experimental work in science or technology, seeking advancement and resolving scientific or technological uncertainty. That can include basic research, applied research or experimental development. Revenue’s eligibility guidance sets the test.
Ask the technical team to explain the uncertainty before you start adding up salaries:
- What could not be readily established using the knowledge and capability available in the field?
- What did the team investigate or test?
- What changed as a result of the work?
- Which records show that process as it happened?
Routine development, configuration or commercial risk does not become qualifying R&D because the project used AI or took longer than expected. Equally, an unsuccessful technical project is not automatically excluded. The qualifying activity and supporting evidence matter.
Software, manufacturing and other technology businesses should apply the same test. A sector label does not settle a claim.
What expenditure should you review?
Build the cost schedule from the qualifying work, then reconcile it to the accounts. Do not start with the entire development budget and assume it all qualifies.
Employee time, materials, equipment, outsourced work and cloud costs need their own assessment. Outsourcing and capital expenditure have specific rules. Grants can affect the expenditure available for the credit. Use Revenue’s R&D manual when reviewing these categories.
For staff, connect the allocation to what people actually did. A job title or a payroll report by itself does not explain the proportion of qualifying work. Keep the allocation method, evidence and reconciliation together.
Where a grant supports the same project, put the grant agreement beside the cost schedule. Agree the treatment before the claim is calculated. Our Irish business grants resource can help you identify funding routes, but each grant and tax claim still needs its own eligibility review.
Keep evidence while the work happens
A year-end write-up is easier to prepare when the project already has a record of its goals, experiments, technical decisions and results.
Keep dated development records alongside the financial records. Make it possible to trace an amount in the claim back to the cost, person, project and activity supporting it.
For a software business, that might mean the relevant design decisions, test results and development history, rather than a list of released features. The list says what you shipped. It may not show the uncertainty you worked through.
Agree who owns the technical explanation, who maintains the costs and who reviews the tax treatment. Accounting software can organise expenditure. It cannot establish the scientific or technological test for you.
Pre-filing notification: do not leave it to the return
For periods beginning on or after 1 January 2024, a company claiming for the first time, or with no claim in the previous three years, must notify Revenue at least 90 days before making the claim. The notification is submitted through MyEnquiries in ROS. See Revenue’s pre-filing instructions.
That is 90 days before the actual claim, not simply before the normal CT1 deadline. Put the planned claim date and notification date into the same calendar.
For example, if you plan to claim on 23 September 2027 and notification is required, submit it by 25 June 2027 at the latest to allow 90 days. Leave time to check the submission rather than aiming for the final day.
Notification does not confirm that the activity qualifies. It is one step in a properly supported claim.
How to claim the credit
The claim is made through ROS on the company’s Corporation Tax return. It must be made within 12 months of the end of the accounting period in which the expenditure was incurred. Revenue’s claim instructions confirm both requirements.
For a period ending 31 December 2026, the R&D claim deadline is 31 December 2027. That does not extend the ordinary Corporation Tax return deadline. Plan the claim and CT1 together, with any notification completed in time.
Before filing, reconcile the qualifying cost schedule to the accounts, confirm the rate for the period and check the payment elections. Agree who checks the R&D entries on the CT1. A technical report and a tax return are different parts of the same claim.
When will the R&D credit turn into cash?
The credit is available through annual instalments, with an election to receive payment or offset tax. It is not necessarily three equal amounts.
For qualifying expenditure under section 766C in the 35% regime, the first instalment is the greater of 50% of the credit or €87,500, capped at the total credit. The second is 60% of the remaining balance; the third is what remains. Building claims under section 766D have a separate calculation. See Revenue’s instalment guidance, sections 2.3.1 and 2.3.2.
For the €140,000 expenditure credit illustrated above:
| Instalment | Calculation | Amount |
|---|---|---|
| First | €87,500 is greater than 50% of €140,000 | €87,500 |
| Second | 60% of the €52,500 balance | €31,500 |
| Third | Remaining balance | €21,000 |
| Total | Credit at 35% of €400,000 | €140,000 |
This table shows the allocation, not promised bank receipt dates. If you elect to offset tax, that amount is not also a cash receipt. Revenue enquiries can affect the time it takes to receive payment.
Plan the business around a delay as well as an entitlement
If you need the first instalment to fund payroll, show what happens if it arrives later. Keep the expected receipt visible in your cash-flow forecast, then test a delay separately.
Does the business still have enough cash? Would a hire need to wait? Is there funding available before the gap appears?
That is the practical question behind the claim. A correctly calculated credit can still arrive too late for a commitment you have already made.
How Around Finance helps technology businesses
The monthly records, tax calendar and cash plan should support each other. They should also make it clear who is responsible for the technical assessment and specialist claim work, where that is needed.
See our finance support for technology businesses for the wider reporting and planning role. Agree the scope of any R&D claim work separately rather than assuming it is included in ordinary year-end accounts.
If you run an Irish business turning over €250,000 or more and want a clearer view of the records, tax and cash behind your growth plans, Book a Finance Fit Call.
FAQs
Is the Irish R&D tax credit 30% or 35%?
35% applies where the accounting period’s specified return date is on or after 23 September 2027, generally periods ending 31 December 2026 or later. Earlier qualifying periods can use 30%. Check the period, not just the filing date.
Can a loss-making company claim?
The credit is not limited to profitable companies. The company, activity and expenditure must qualify, and the payment or tax-offset rules still apply. A loss does not itself establish eligibility.
Does developing software automatically qualify?
No. The work must satisfy the scientific or technological advancement and uncertainty tests. Routine development or implementing existing technology is not automatically qualifying R&D.
Can an unsuccessful project qualify?
Yes, qualifying R&D does not have to succeed. You still need evidence of the qualifying work and expenditure. Failure by itself is not evidence of technological uncertainty.
Do I need to notify Revenue before claiming?
For periods beginning on or after 1 January 2024, first-time claimants and companies with no claim in the previous three years must notify at least 90 days before making the claim.
Can I claim both a grant and an R&D credit?
A grant does not automatically prevent a claim. Review the grant-funded expenditure and the terms before calculating the credit. Do not assume the same cost receives relief twice without adjustment.
How long does payment take?
There is no guaranteed receipt date for your cash plan. Annual instalment rules govern the allocation, and Revenue review can affect timing. Check the claim’s position and model a delay before relying on the money.
Who should prepare the claim?
Agree responsibility for the technical assessment, cost schedule and CT1. Specialist technical input may be needed. Choose someone who can explain the evidence and tax treatment, and confirm the scope in writing.
