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The Office of the Revenue Commissioners provides a number of supports and initiatives to assist start-up business and small and medium enterprises. Initiatives include tax incentives - tax reliefs, deductions and exemptions as well as supports and other initiatives.
EII is a tax relief that aims to encourage individuals to provide equity-based finance to trading companies.
You can claim tax relief on your investment when certain conditions are met. For shares issued up to and including 8 October 2019, the relief is split into two tranches:
thirty fortieths (30/40) in the year of investment
ten fortieths (10/40) in the fourth year after the initial investment.
For shares issued after 8 October 2019, the relief is available in full in the year of the investment.
Companies will issue shares to you for the amount you invest. You must hold those shares for at least four years.
EII is available to qualifying individuals who make qualifying investments. You will qualify if you, or your family, do not own any capital in the company.
Money spent by a company on research and development activities may qualify for the R&D Tax Credit. The credit is calculated at 25% of qualifying expenditure and is used to reduce a company’s Corporation Tax (CT). Where a company has offset current and previous years’ CT liabilities, it may apply for credit payable in installments.
A company may qualify for the R&D Tax Credit if:
- It is within the charge of CT in Ireland
- It carries out qualifying R&D activities in Ireland or the European Economic Area (EEA)
- The expenditure does not qualify for a tax deduction in another country.
What are qualifying R&D activities?
To qualify for the R&D Tax Credit, a company’s research and development activities must:
- Involve systemic, investigative, or experimental activities
- Be in the field of science or technology
Involve one or more of these categories of R&D:
- Basic research
- Applied research
- Experimental development
- Seek to make scientific or technological advancement
- Involve the resolution of scientific or technological uncertainty.
Click here for further detailed information on the R&D Tax Credit Research and Development (R&D) Tax Credit (revenue.ie)
Starting in Business
Startup Refunds for Entrepreneurs (SURE)
If you are interested in starting your own company, you may be entitled to an income tax refund of up to 41% of the capital that you invest under SURE. Depending on the size of your investment you may be entitled to a refund of income tax paid over the six years prior to the year in which you invest.
The scheme provides relief from corporation tax on the trading income and certain gains of new start-up companies in the first 3 years of trading. There will be full relief on income and gains relating to the trade where total corporation tax liability in any of the first 3 accounting periods does not exceed €40,000. There will be marginal relief where the tax liability falls between €40,000 and €60,000. You can earn €320,000 tax free per year for the first 3 years. The relief available is now based on the amount of employers’ PRSI paid by an employer in respect of their employees.
Recruiting
Revenue Job Assist offers both employers and workers an incentive where people who have been 12 months on the live register (or disability allowance) are employed:
- The employer gets double write-off of the wages plus employers PRSI for three years – even at the minimum wage, it is worth€2,500 per year to a company and up to €8,000 per year to a sole trader
- The worker gets an extra tax allowance – of€3,810 plus €1,270 for each child in year 1, and two-thirds of these allowances in year 2, one-third in year 3 – for a worker on the 20% rate it is worth at least €762 in the first year or €1,524 over the three years.
The Wage Subsidy Scheme provides financial incentives to employers, outside the public sector, to employ disabled people who work more than 20 hours a week. A person on the Wage Subsidy Scheme is subject to the same conditions of employment as other employees These conditions include PRSI contributions, annual leave, tax deductions and the going rate for the job.
The SMEs Online Tool is a cross-governmental guide to help small businesses know which of the over 80 Government supports could possibly fit their business.
