An updated version of Irish Revenue’s tax guidance on the research and development (R&D) tax credit, released April 28, adds a section on rent as a qualifying expenditure for R&D activities, among a few other revisions.
New section 4.2 explains that expenses related to renting a space to carry on R&D are often incurred “for the purposes of” or “in connection with” the R&D activity. However, the eligibility of such expenditures also depends on the extent to which they are incurred wholly and exclusively in the carrying on of the R&D activities.
As an example of rental expense that may be a qualifying expenditure, the guidance notes rental expenses relating to the rental of a specialized laboratory that is necessary to carry out a certain type of R&D activity. It contrasts this with the rental of office space that may be necessary to house an R&D team but is not integral to the R&D activity.
Other additions in the latest update include guidance related to Covid-19 pandemic impacts, clarification on the treatment of monies received from wage subsidy schemes, and a new example of a subcontractor that would be ineligible to claim the R&D credit.
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