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BDO Ireland launches new Assessment Tool to Avail of Significant Tax Reliefs

26 November 2019

The BDO R&D Tax team have developed an easy to use assessment tool that allows you to check whether your company might be eligible to avail of significant tax reliefs available to companies in Ireland.

The tool was developed following the announcement of Ireland’s growth strategy and, to date, has provided sufficient tax savings for several Irish companies in sectors including MedTech, Computer Science, and Manufacturing.

Your company may have the potential to make significant savings with either the Research and Development (“R&D”) tax credit regime or the Knowledge Development Box (“KDB”) regime.

The R&D Tax Credit regime, provides a 25% credit for qualifying expenditure on qualifying activities. This means an effective tax deduction of up to 37.5%, with the R&D tax credit being cash refundable where there is not a sufficient level of taxable profits within the company/group. There is a 31st December 2019 deadline for 2018 R&D Tax Credit claims for December year end companies. 

The KDB regime, offers an effective tax rate of 6.25% on qualifying profits generated in periods commencing on or after 1 January 2016. This means that you could pay 50% less corporation tax on such profits. As the first OECD compliant box-type regime, the relief available is linked to the percentage of qualifying R&D expenditure incurred in Ireland. It is worth noting that there are only 24 months to make a KDB claim and so 31st December 2019 is the deadline for 2017 KDB claims for December year end companies.

As there are links between the KDB and the R&D regimes, companies claiming or considering claiming the R&D tax credit should also examine their potential to access the KDB regime.

Commenting on the tool, Mark O’Sullivan, Head of R&D Technical Services said “Many companies aren’t aware that they can apply for these tax regimes, this was the main reason that we developed the easy to use tool” 

Take the eligibility assessment today for both the R&D Tax Credit and the KDB to see if your company may qualify.

The BDO team that developed this tool was led by Derek Henry, Head of Innovation Tax Services and supported by Mark O’Sullivan, Head of R&D Technical Services.