R&D tax credit increased to 35%
R&D tax credit rate increased from 30% to 35%. First-year payment threshold raised to €75,000.
What changed and what to do
What changed
Finance Act 2024 raised the R&D tax credit from 30% to 35% of qualifying R&D expenditure, with the first-year payment threshold (the amount payable in the first instalment) increased from €50,000 to €75,000. The credit is refundable in cash over three years where the company has insufficient corporation tax to absorb it.
Who it affects
- Companies undertaking qualifying R&D activities in Ireland
- Tech, biotech, software and engineering companies
- Loss-making startups (can still claim the refundable credit)
What to do
Review R&D activities for the current accounting period. Document the science and technology advance being sought. Submit the claim within 12 months of the accounting period end.
Participation exemption for foreign dividends
New participation exemption removes Irish corporation tax on qualifying foreign dividends received by Irish companies.
What changed and what to do
What changed
Ireland introduced a participation exemption from Corporation Tax on foreign dividends from EU/EEA and tax-treaty country subsidiaries (5% minimum shareholding, 12-month minimum holding). Replaces the previous tax-and-credit system for most groups.
Who it affects
- Irish holding companies with foreign subsidiaries
- International groups with Irish parent
- Companies with EU/EEA or treaty-country investments
What to do
Review group structure to confirm holdings meet the 5% / 12-month tests. Elect into the exemption on the corporation tax return.
Pillar Two 15% minimum effective tax rate
Multinational groups with €750m+ revenue subject to top-up tax to bring effective rate to 15%.
What changed and what to do
What changed
Ireland transposed the EU Pillar Two Directive: in-scope multinational groups (consolidated revenue €750m+) must pay a top-up tax if their effective rate in any jurisdiction falls below 15%. Domestic top-up tax applies first.
Who it affects
- Multinational groups with €750m+ consolidated revenue
- Irish subsidiaries of large global groups
- Not relevant to standard SME owner-managed companies
What to do
If your group is in scope, prepare GloBE Information Return and country-by-country reporting. Standard SMEs continue at the 12.5% trading rate.
Audit exemption thresholds raised
Small company audit exemption thresholds raised: turnover €15m, balance sheet €7.5m, employees 50.
What changed and what to do
What changed
Statutory Instrument 301/2024 raised the small company audit exemption thresholds approximately 25%. Companies meeting two of three (turnover ≤€15m, balance sheet ≤€7.5m, employees ≤50) for two consecutive years can claim audit exemption.
Who it affects
- Growing SMEs previously approaching audit thresholds
- Holding companies of small groups
What to do
Re-test your accounts against the new thresholds. If you now qualify, you can drop the audit at the next year-end. CRO filings still required.
VAT registration thresholds raised
Goods threshold raised to €85,000. Services threshold raised to €42,500.
What changed and what to do
What changed
Finance Act 2024 raised the VAT registration thresholds from €80,000 to €85,000 for goods and from €40,000 to €42,500 for services. Once any 12-month rolling period exceeds the threshold, registration is mandatory.
Who it affects
- Sole traders and small companies approaching the threshold
- Service businesses (consultants, agencies) — lower threshold
What to do
Track rolling 12-month turnover monthly. Voluntary registration may still make sense if your customers are VAT-registered businesses.