Renewable
Energy
R&D Tax Credits
18 September 2014
Brian Thornton
Partner
KPMG
Agenda
1. What is the R&D tax credit?
2. Key technical requirements
3. Eligible expenditure & finance
© 2014 KPMG, an Irish partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in Ireland.
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What is the R&D Tax
Credit?
What is the R&D tax credit?
€25 credit / cash for every
incremental €100 spent
© 2014 KPMG, an Irish partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in Ireland.
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What is the R&D tax credit?
The credit incentivises companies to
invest in Ireland and
increase R&D spend
in the Irish economy.
The credit encourages companies to create
new jobs in Ireland.
The credit rewards companies being
innovative.
The R&D tax credit is key in Ireland’s
economic growth policy.
© 2014 KPMG, an Irish partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in Ireland.
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Key technical
requirements
Qualifying Activities
5 Key Requirements
Systematic,
investigative or
experimental
activities
I.
Revenue approved
field of science or
technology
Basic research
II.Applied
research
III.Experimental
development
Involve the
resolution of
scientific or
technological
uncertainty
Seek to
achieve
scientific or
technological
advancement
© 2014 KPMG, an Irish partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in Ireland.
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Eligible expenditure
and finance
Eligible expenditure
Pension
VHI
Share
options
R&D Buildings
Salary
Eligible
Expenditure
Plant and
Machinery
Light, heat,
power, and...?
Subcontracted
R&D
© 2014 KPMG, an Irish partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in Ireland.
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Eligible expenditure
Other eligible expenditure?

Outsourced expenditure to third parties and universities to
carry on R&D
© 2014 KPMG, an Irish partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in Ireland.
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Claiming the R&D tax credit
The R&D tax credit must be claimed
within 12 months of the financial year end!
© 2014 KPMG, an Irish partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in Ireland.
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Claim calculation
Sample calculation:
Company X
Year ended 31/12/2013
Salaries
€500,000
Plant & Machinery
€500,000
Overheads
€200,000
Eligible Spend =
€1,200,000
Less Grant
(€200,000)
(€0)
Less Base Year (2003)
Incremental Spend =
25% Tax Credit =
€1,000,000
€250,000
© 2014 KPMG, an Irish partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in Ireland.
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Take Home Points:
1. Worthwhile credit - €25 rebate for every €100 spent
2. Must be claimed within 1 year
3. Significant documentation requirements – the price
to be paid!
4. Important to seek advice early
© 2014 KPMG, an Irish partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in Ireland.
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www.kpmg.ie/r&d
© 2014 KPMG, an Irish partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in Ireland.
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Thank You
Brian Thornton
091 534634
[email protected]