Ireland's R&D corporation tax credit gives companies a credit against corporation tax for qualifying R&D expenditure. Credit that cannot be used can be paid out in three instalments. It is administered by the Revenue Commissioners. Eligibility has two halves: the company, which must be within the charge to Irish corporation tax, and the activities, which must meet the definition in section 766 of the Taxes Consolidation Act 1997 and fall within the categories prescribed by regulation. This page covers both and the location rule.
Who can claim
Companies within the charge to Irish corporation tax that carry on qualifying R&D activities. The claimant must carry on a trade, and the R&D activities must be carried on by the company itself or, within limits, by subcontractors and third level institutions on its behalf. There is no size test and no minimum spend. A company may surrender part of its credit to key employees under section 472D, within limits.
| Test | Rule | Notes |
|---|---|---|
| Entity | A company within the charge to Irish corporation tax | Irish resident companies and non-resident companies trading through an Irish branch; individuals and partnerships do not qualify |
| Trade | The company carries on a trade to which the R&D relates | No size test and no minimum spend |
| Activities | Qualifying R&D activities within the prescribed categories | See below |
| Location | Carried on in Ireland or elsewhere in the European Economic Area | Expenditure must not qualify for a tax deduction in another territory |
| Notification | First-time claimants, and companies that have not claimed in the previous 3 years, must notify Revenue at least 90 days before the claim | See the how to claim page |
What counts as R&D
Qualifying R&D activities are systematic, investigative or experimental activities in a field of science or technology. They must be basic research, applied research or experimental development, must seek to achieve scientific or technological advancement, and must involve the resolution of scientific or technological uncertainty. Revenue reads the definition as two tests, and both must be passed:
- The science test. Was the activity basic research, applied research or experimental development in a prescribed field of science or technology, seeking an advancement and resolving an uncertainty that a competent professional in the field could not readily resolve? Revenue may consult an independent expert on this question. The science test page works through it.
- The accounting test. Was the expenditure incurred wholly and exclusively in carrying on those activities, and was it correctly computed under the Act? The eligible expenditure page covers it.
The three categories follow the Frascati definitions: basic research is experimental or theoretical work without a specific application in view; applied research is directed to a specific practical aim; experimental development draws on existing knowledge to produce new or substantially improved materials, products, devices, processes, systems or services. Advancement means advancing the field, not the company. Uncertainty is judged by what a competent professional could not know or readily deduce. A project that fails can still qualify; a project whose outcome was known in advance cannot.
Activities that do not qualify
The 2004 Regulations list the fields of science and technology that qualify, broadly the natural sciences, engineering and technology, medical sciences and agricultural sciences, and list activities that are not R&D even when connected to a qualifying project.
| Excluded by the Regulations | Why it matters |
|---|---|
| Research in the social sciences, arts or humanities | Outside the prescribed fields |
| Routine testing and analysis for quality or quantity control | Testing to a known standard is not experimental |
| Alterations of a cosmetic or stylistic nature | Appearance is not a technological advance |
| Operational research such as management studies or efficiency surveys | Business process work |
| Corrective action for breakdowns during commercial production | Troubleshooting is not research |
| Legal and administrative work on patents and licences; market research; sales promotion; prospecting and drilling for minerals, petroleum or gas; commercial and financial steps to launch a product | Commercial activity around the R&D |
| Business application software, routine maintenance and development using known methods and tools | Revenue's guidance states that these do not qualify unless they resolve a scientific or technological uncertainty; the main exclusion in software claims |
Where the work is done
The activities must be carried on in the State or another European Economic Area state, and the expenditure must not be available for relief against tax in another territory. A company that carries on part of its R&D through a branch in Germany can include that expenditure if it is not relieved there; expenditure in the United States cannot be included. Work subcontracted to universities, institutes of higher education and other unconnected persons is subject to its own caps, covered on the eligible expenditure page.
Illustrative example
Illustrative example. Shannon Diagnostics Limited, a hypothetical Irish company, is developing a point-of-care assay that must detect a biomarker at a tenth of the concentration current assays manage. The published literature does not show how, and its lead scientist records why the obvious approaches fail. The team frames hypotheses about capture chemistry, runs controlled experiments and documents results: experimental development in the medical sciences, seeking an advancement and resolving an uncertainty. The clinical marketing study and the regulatory filing are excluded. Shannon's qualifying expenditure of €600,000 in its accounting period ending 31 December 2025 earns a 30% credit of €180,000, payable in instalments if it cannot be used against corporation tax.
Related pages
Official sources
Educational content only, not tax advice. See the disclaimer.