Taxes Consolidation Act 1997 section 766B

Limitation of tax credits to be paid under section 766 or 766A

Section 766B limits the amount of refundable R&D tax credit that Revenue can pay to a company under sections 766(4B) and 766A(4B), by reference to the company's corporation tax history and its payroll liabilities.

• Payroll liabilities comprise PAYE, PRSI (including health contributions and National Training Fund levies), USC, and any other employment-related levies the company must remit to the Collector-General for the relevant payroll period.
• The maximum refundable credit is capped at the greater of: corporation tax paid in the ten years before the claim period (less any credits already refunded), the company's payroll liabilities for the relevant payroll period (subject to a reduction for prior claims), or — for micro or small companies — twice the payroll liabilities for the accounting period in which the R&D expenditure was incurred.
• The relevant payroll period spans two consecutive accounting periods: the period immediately before the one in which the R&D expenditure was incurred, plus that expenditure period itself; the two-year payroll limit is reduced where payable credits claimed in earlier periods exceeded the payroll liabilities for those periods.
• This limitation does not apply where the claim is made in a corporation tax return whose specified return date is on or after 23 September 2023, meaning in general it ceases to apply for accounting periods ending 31 December 2022 or later.