Ireland R&D Tax Credit Rises to 35%: What Companies Should Prepare

On 23 April 2026 Revenue published eBrief No. 085/26 updating Tax and Duty Manual Part 29-02-03 for Research and Development (R&D) corporation tax credit changes introduced by Finance Act 2025. The headline rate of the credit increases from 30% to 35%, and the first instalment threshold rises from €75,000 to €87,500 — with related administrative simplifications for qualifying staff costs and laboratory buildings.

Timing matters. Revenue’s manual states that the credit is given at 30% of allowable expenditure for accounting periods commencing on or after 1 January 2024, and at 35% for accounting periods with a specified return date on or after 23 September 2027. In general, that 35% rate applies to accounting periods ending 31 December 2026 or later. Companies planning 2026 year-ends should already be building claim files at the higher rate assumptions.

Revenue highlights an administrative simplification: where an employee performs at least 95% of their duties in carrying on qualifying R&D activities, 100% of that employee’s emoluments may be included as qualifying expenditure. The manual also clarifies that expenditure on constructing a qualifying building includes expenditure on constructing a laboratory used in qualifying R&D activities.

For accounting periods commencing on or after 1 January 2023, claims must be made under section 766C and/or section 766D TCA 1997. Older section 766 / 766A material has been removed from the current TDM — use the archived versions on Revenue’s site only for historic periods.

Under the updated rules for periods with a specified return date on or after 23 September 2027, the first instalment is the greater of €87,500 (or the credit claimed if lower) or 50% of the credit claimed. The second instalment is three-fifths of any remaining balance, and the third instalment is whatever is left. Revenue’s worked examples in Part 29-02-03 show a calendar-year 2026 company with €500,000 of qualifying expenditure generating a €175,000 credit at 35%.

Claims are made through ROS on the corporation tax return and must be made within 12 months from the end of the accounting period in which the expenditure is incurred. Keep contemporaneous project documentation — scientific or technological uncertainty, systematic investigation, and cost allocation — with the claim file; rate increases do not relax the qualifying-activity tests.

Confirm your accounting period end and specified return date so you know whether the 30% or 35% rate and the €75,000 or €87,500 first-instalment threshold apply. Diary pre-filing notifications where required (Forms 766C / 766D) and align payroll coding so the 95% duties simplification can be evidenced if you rely on it.

Reconcile contractor and university payments against the statutory caps in the guidance, and separate laboratory construction costs clearly from general premises spend. August PAYE and VAT deadlines remain separate obligations while you build the R&D pack.

Qualifying expenditure schedules are only as good as the underlying project and payroll records. FinnAccountings helps Ireland and UK companies organise bookkeeping and tax prep drafts with Chartered Accountant insight before you or your Chartered Accountant (Ireland) or ICAEW/ACCA adviser reviews an R&D claim. Start a free trial for review-ready packs — we prepare drafts; we do not file corporation tax returns or R&D claims with Revenue on your behalf.

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See our Ireland August 2026 SME tax deadlines checklist for the wider filing calendar, and use the free tax calculator only for high-level income-tax planning — it does not compute R&D credits.

Ireland August 2026 SME tax deadlines →