Research and development can involve high costs for Irish companies developing new products, improving technology, testing production methods, or solving technical problems. The R&D Tax Credit Ireland 2026 regime allows qualifying companies to claim a tax credit on eligible R&D expenditure, subject to Irish tax rules. For relevant accounting periods beginning on or after 1 January 2026, the rate has increased to 35%. This gives companies a reason to review their current R&D activities before preparing their Corporation Tax return. However, not every development project qualifies. A company must meet the required scientific or technological conditions and keep suitable records to support its claim.
For businesses operating in Ireland, the R&D Tax Credit can form part of wider tax planning. Technology companies, manufacturers, engineering firms, life sciences businesses and SMEs may all have projects worth reviewing. Finsoul Ireland can help businesses assess potential R&D activities, review qualifying expenditure and prepare the information needed for a claim under the current Irish rules.
What Is the R&D Tax Credit in Ireland?
The R&D Tax Credit is an Irish Corporation Tax relief available to companies carrying out qualifying research and development activities. A company can claim a credit based on qualifying R&D expenditure when its activities meet the required scientific or technological tests. The relief is not a general payment for research, product development or innovation.
The company must show that the work seeks scientific or technological advancement and involves scientific or technological uncertainty. For relevant accounting periods beginning on or after 1 January 2026, the credit rate is 35%. The claim is made through the company’s Corporation Tax process. Businesses should review their projects and costs before filing because routine development, ordinary testing and general operating expenses may not qualify under the Irish rules.
What Changed for the R&D Tax Credit in 2026?
What Changed for the R&D Tax Credit in 2026?
The R&D Tax Credit rules changed in 2026, giving Irish companies a higher credit rate and updating several claim and payment provisions.
- 35% Tax Credit Rate: The rate increased from 30% to 35% for relevant accounting periods beginning on or after 1 January 2026.
- €87,500 First-Year Threshold: The first-year payment threshold increased from €75,000 to €87,500.
- 95% Employee Rule: Specific treatment applies to employee emoluments where an employee spends at least 95% of their duties on qualifying R&D activities.
- Laboratory Expenditure: The 2026 rules clarify certain expenditure relating to qualifying laboratory construction or refurbishment.
- Updated Claim Rules: Companies should use the current 2026 rules and figures when preparing their R&D Tax Credit claim.
Who Can Claim the R&D Tax Credit in Ireland?
A company must satisfy the relevant Corporation Tax and R&D requirements before making a claim.
- Irish Corporation Tax company: The claimant must fall within the relevant Irish Corporation Tax rules.
- Qualifying R&D activity: The company must carry out work that meets the required scientific or technological conditions.
- Eligible location: Qualifying activities may be carried out in Ireland and, subject to the applicable rules, certain activities may qualify when carried out in the EEA or UK.
- Qualifying expenditure: The claim must relate to expenditure that meets the relevant R&D Tax Credit requirements.
- Supporting evidence: The company must have records that support both the nature of its R&D work and the amount being claimed.
What Qualifies as R&D Under Irish Rules?
A project does not qualify simply because it is new to the company or involves technology. The activity must satisfy the relevant Irish R&D tests.
- Scientific or technological field: The work must relate to an appropriate field of science or technology.
- Scientific or technological advancement: The project should seek an advancement in the relevant field.
- Scientific or technological uncertainty: The company must face a genuine uncertainty that cannot readily be resolved using existing knowledge.
- Systematic investigation: The work should involve a structured process of investigation, testing or experimentation.
- Qualifying R&D activity: The project should fall within the relevant categories of basic research, applied research or experimental development.
What R&D Expenditure Can Companies Claim?
After identifying qualifying projects, the company needs to assess the costs connected with those activities. The 35% rate should not simply be applied to the entire development budget.
Employee Costs
Employee expenditure can make up a large part of an R&D claim where staff are engaged in qualifying activities. The company should be able to connect employee costs to the relevant R&D projects and work carried out.
Materials and Consumables
Materials used during qualifying R&D activities may qualify where they meet the applicable conditions. Businesses should keep records showing how these materials relate to the relevant research or development project.
Subcontracted R&D
Certain expenditure on subcontracted R&D may qualify, subject to the applicable Irish conditions and limits. Contracts, invoices and descriptions of the work should be retained.
Utilities and Related Costs
Certain costs connected with carrying out R&D may be considered under the relevant rules. Businesses should separate R&D-related expenditure from ordinary operating costs when preparing the calculation.
Capital Expenditure
Certain capital expenditure connected with qualifying R&D facilities may qualify where the required conditions are met. Laboratory-related expenditure should receive particular attention when preparing a 2026 claim.
How Much Is the R&D Tax Credit Worth in 2026?
For relevant accounting periods beginning on or after 1 January 2026, the Irish R&D Tax Credit rate is 35% of qualifying R&D expenditure, subject to the applicable conditions. A simple calculation can show the potential value of the relief. If a company has €100,000 of qualifying R&D expenditure, 35% would produce a potential credit of €35,000. If qualifying expenditure is €250,000, the calculation would be €87,500.
These examples do not mean that every company spending €100,000 or €250,000 on development will receive those amounts. Only expenditure that meets the relevant rules can be included. The payment structure also needs to be considered because the credit is dealt with through the Irish tax system under specific instalment rules. Companies should therefore assess each project and cost category before applying the 35% rate to their claim.
How Does the R&D Tax Credit Payment Work?
The R&D Tax Credit is claimed through the Corporation Tax process, with payment subject to the rules applying to the company’s claim.
- Corporation Tax claim: The credit is claimed through the relevant Corporation Tax return process.
- First-year threshold: The 2026 first-year payment threshold is €87,500.
- Higher claims: Claims above the relevant threshold are subject to the applicable payment rules rather than being treated as one automatic payment.
- Instalments: The credit is generally paid over three years under the applicable rules.
- Actual payment: The amount and timing depend on the qualifying claim and the company’s circumstances.
How to Claim the R&D Tax Credit in Ireland?
Companies should begin preparing their claim before the Corporation Tax return is due. A clear process can help connect technical evidence with the financial calculation.
Step 1: Identify R&D Projects
List the projects carried out during the accounting period and identify work that may meet the Irish R&D requirements.
Step 2: Assess the R&D Criteria
Review each project for scientific or technological advancement, uncertainty and systematic investigation or experimental work.
Step 3: Calculate Qualifying Expenditure
Review employee costs, materials, subcontracted work and other relevant expenditure. Remove costs that do not meet the applicable requirements.
Step 4: Prepare Technical Evidence
Record the project objective, technical problem, uncertainty, development work, testing and results. The records should explain why the work went beyond routine development.
Step 5: Check Pre-Filing Requirements
First-time claimants and companies that have not made an R&D claim during the previous three years may need to submit a pre-filing notification at least 90 days before making the claim.
Step 6: Submit the Claim
The claim is submitted through Revenue’s online system as part of the Corporation Tax return. Companies should also check the filing deadline that applies to their accounting period.
Finsoul Ireland can assist businesses in organising the project review, expenditure assessment and claim information before submission.
Do You Need to Submit a Pre-Filing Notification?
Some companies need to notify Revenue before making an R&D Tax Credit claim. This requirement should be checked well before the Corporation Tax return is prepared.
- First-time claimant: A company making its first R&D Tax Credit claim may be subject to the pre-filing notification requirement.
- No recent claim: The requirement can also apply where a company has not made an R&D claim during the previous three years.
- 90-day period: The notification generally needs to be submitted at least 90 days before the claim.
- Revenue process: The company must use the relevant Revenue process for the notification.
- Early planning: Businesses should check this requirement before the filing stage rather than waiting until the return is ready.
What Documents Are Needed for an R&D Tax Credit Claim?
A company should retain records that explain what was done, why the activity qualified, and how the expenditure was calculated.
- Project records: Keep project descriptions, objectives, development plans, and records of the work carried out.
- Technical evidence: Keep records of technical uncertainty, experiments, testing, findings and results.
- Employee information: Retain payroll information and records showing employee involvement in R&D activities.
- Financial records: Keep invoices, accounting records and expenditure calculations supporting the claim.
- Supporting records: Retain relevant contracts, subcontractor information, grant details and other documents connected with the calculation.
Common R&D Tax Credit Compliance Issues
Companies can face questions when their technical evidence does not clearly support the activities included in the claim.
- Routine development claimed as R&D: Normal product updates and routine engineering work may not meet the R&D tests.
- Unclear technical uncertainty: A general project description may not show that genuine scientific or technological uncertainty existed.
- Incorrect cost allocation: Businesses should not automatically include an entire salary, project budget, or supplier invoice.
- Missed notification requirement: Companies subject to the 90-day notification rule can create problems by leaving the process until the filing stage.
- Outdated calculations: Using the old 30% rate or €75,000 threshold for a relevant 2026 accounting period can result in an incorrect claim.
Why Should Irish Companies Review Their R&D Claims?
Companies may carry out qualifying R&D without describing the work as “R&D” in their internal accounts. A software business may be solving a technical problem, a manufacturer may be testing a new production process, and an engineering company may be developing a new technical solution.
- Technology companies can review software and technical development projects.
- Manufacturers can assess new production methods and technical testing.
- Engineering firms can review experimental design and technical development.
- Life sciences companies can assess qualifying scientific research and development.
- SMEs can review internal R&D activity even if they have never previously made a claim.
Finsoul Ireland can help companies assess projects that may have been overlooked in previous Corporation Tax periods and determine which areas deserve further review.
Conclusion
The R&D Tax Credit Ireland 2026 rules give qualifying companies the opportunity to claim a 35% tax credit on eligible R&D expenditure for relevant accounting periods beginning on or after 1 January 2026. The increased rate and €87,500 first-year payment threshold make it worth reviewing current R&D activity. Companies still need to meet the scientific and technological tests and support their claim with suitable records. The pre-filing notification requirement and Corporation Tax filing deadline should also be checked before submission.
Finsoul Ireland can support Irish businesses with reviewing R&D activities, assessing qualifying expenditure and preparing claim information under the current rules. A review before filing can help companies identify potential qualifying expenditure and avoid common calculation or compliance problems.
FAQs
What is the R&D Tax Credit rate in Ireland in 2026?
The rate is 35% for relevant accounting periods beginning on or after 1 January 2026, subject to the applicable conditions.
Can a startup claim the R&D Tax Credit in Ireland?
Yes. A startup may claim if it falls within the relevant Corporation Tax rules and its R&D activities and expenditure meet the required conditions.
Can software development qualify for the Irish R&D Tax Credit?
Yes, software development can qualify when it involves a qualifying technological advancement and genuine technological uncertainty rather than routine development.
How long does a company have to claim the R&D Tax Credit?
A company generally has 12 months from the end of the accounting period in which the qualifying expenditure was incurred to make the claim.
Does a company need to notify Revenue before its first R&D claim?
First-time claimants and companies that have not made an R&D claim during the previous three years may need to submit a pre-filing notification at least 90 days before making the claim.