Taxes Consolidation Act 1997 section 766C

Research and development corporation tax credit

Section 766C provides for a research and development (R&D) corporation tax credit currently equal to 30 per cent (rising to 35 per cent) of qualifying R&D expenditure attributable to a company, payable in three annual instalments, with the option to surrender excess credits to key employees.

• A company may claim an R&D corporation tax credit of 30 per cent (rising to 35 per cent) of qualifying R&D expenditure allocated to it from its group's total qualifying R&D spend for the accounting period, with the credit paid in three annual instalments and each instalment either offset against tax liabilities or paid directly by Revenue.
• Where the credit exceeds the company's tax liabilities, the excess may be surrendered to one or more key employees, subject to a cap equal to the company's corporation tax payable for the period, with the company notifying each key employee in writing of the amount surrendered.
• Claims must be made on the corporation tax return within 12 months of the end of the accounting period in which the expenditure was incurred, and a pre-filing notification must be submitted to Revenue at least 90 days before the claim is made where no R&D credit claim has been made in any of the preceding three accounting periods.
• If a claim is found to be unauthorised, the company may be charged to tax under Case IV of Schedule D on an amount equal to four times the unauthorised credit, with no losses or allowances available to shelter that charge, and interest applying from the date of payment or offset.