Taxes Consolidation Act 1997 section 766A

Tax credit on expenditure on buildings or structures used for research and development

Section 766A provides for a 25% tax credit on expenditure incurred on the construction or refurbishment of a qualifying building used for research and development activities, with clawback provisions if the building is sold or ceases to be used for R&D within ten years.

• A qualifying building must have at least 35% of its use attributable to R&D activities over a four-year specified relevant period; the 25% credit applies to the proportionate share of construction expenditure referable to R&D use.
• Expenditure does not qualify if it has been met by grant aid, relates to land acquisition, machinery or plant, or R&D expenditure already qualifying under section 766; Irish-resident companies are excluded where the expenditure qualifies for foreign tax relief.
• If the building is sold or ceases to be used for R&D or the same trade within ten years, the credit is clawed back by assessing four times the aggregate relief under Case IV of Schedule D; however, an intra-group transfer to a successor that continues the R&D activities is exempt from clawback.
• Excess credits may be carried forward, surrendered to a fellow group member, carried back against the preceding accounting period, or refunded by Revenue in three instalments; no claim may be made for accounting periods commencing on or after 1 January 2023 (see now section 766D).