The Government will increase the amount of tax relief available to businesses undertaking research and development (R & D) activities in the State from 30 per cent to 35 per cent as part of Budget 2026.

Minister for Finance Paschal Donohoe also announced on Tuesday that the threshold for first-year refunds under the R & D tax credit scheme will increase to €87,500 to support smaller projects.

The relief allows businesses undertaking research to claim back a percentage of the total costs of their activities in cash or against their corporation tax bill in annual instalments.

Since Budget 2025, companies could claim €75,000 back in the first year, an increase from the previous threshold of €50,000 in the previous year and €25,000 before that.

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Delivering his budget speech, Mr Donohoe said he will also publish a “research and development compass” in the coming weeks, “which will consider targeted changes to the R & D tax credit to better align with industry practices, for example in the areas of outsourcing and qualifying expenditure definitions.”

[ Budget 2026 Q&A: Submit your questions to our expertsOpens in new window ]

The Fine Gael TD said Government support for R & D activities is “critical to Ireland’s continuing competitiveness in a challenging global environment”.

More to follow ...