R&D Tax Credit
The Research and Development Tax Credit is a valuable tax-based incentive that is designed to encourage investment in R&D by companies in Ireland. A 25% tax credit for qualifying Research and Development expenditure exists for companies engaged in in-house qualifying research and development undertaken within the European Economic Area. This credit may be set against a company's Corporation Tax liability. The first €100,000 of all qualifying R&D expenditure will benefit from the full 25% R&D tax credit from 2012. This is of particular benefit to SMEs. For larger R&D expenditure, the tax credit will continue to apply only to the amount by which expenditure in 2012 exceeds that incurred in the base year 2003.
Seed Capital Scheme
If you start up and work full-time in your own company, you can claim back the income tax you paid in the previous six years to invest equity into a company (subscribed as shares) engaged in a qualifying trade. The amount of relief is restricted to the amount of the investment. Since November 2011, the scheme is open to a much wider range of sectors and the ceiling on recoverable tax can now be up to €100,000 in each of the six look back years.
Click here for further detailed information on the Seed Capital Scheme
Employment and Investment Incentive (EII) - Relief for Investment in Corporate Trades
The Employment Investment Incentive (EII) is a tax relief incentive scheme that provides tax relief for investment in certain corporate trades. The scheme has replaced the Business Expansion Scheme (BES) The scheme was announced by the Minister for Finance in his Budget 2011 speech and has been approved by the European Commission. Medium-sized enterprises (as defined) operating in what are known as the "non-assisted areas" of Ireland may only qualify for the EII in their seed/start-up phase of development. For State aid purposes, Ireland is divided into "assisted" and "non-assisted" areas. The current "assisted"areas are all areas of Ireland excluding Dublin, Meath, Kildare, Wicklow, Cork city and county (except for Cork Docklands).
Click here for further detailed information on the EII
Three Year Corporate Tax Exemption
The scheme provides relief from corporation tax on the trading income and certain gains of new start-up companies in the first 3 years of trading. There will be full relief on income and gains relating to the trade where total corporation tax liability in any of the first 3 accounting periods does not exceed €40,000. There will be marginal relief where the tax liability falls between €40,000 and €60,000. You can earn €320,000 tax free per year for the first 3 years. The relief available is now based on the amount of employers’ PRSI paid by an employer in respect of their employees.