Tax Relief for Startups in Ireland | ADW Accountants and Business Advisors

How to claim for Tax Relief for your Start-up Company?

The start-up scene is growing rapidly in Ireland. Driven by business visionaries and bolstered by government associations like Enterprise Ireland and local start-up gatherings around the nation, the start-up network in Ireland is growing exponentially year on year. While new companies can have the skill, drive and the involvement in their specific region to amplify the eco-system, there is still one area where numerous entrepreneurs, new or old, can find quite overwhelming and that’s the convoluted universe of Irish tax returns.

This guide identifies a few territories you need to talk about with your tax specialist if you are a part of startup eco-system

 What are the reliefs for individuals looking to set up/ invest in a company

Following are the few points using which companies can set up their investment in other companies.

 SURE: If you have recently set up your very own business, you might be qualified for tax relief under the Startup Refunds for Entrepreneurs scheme. Under this scheme, entrepreneurs can make a claim for a refund against income tax they paid over the past six years.

Employment Investment Incentive: This plan provides tax relief, subject to specific conditions being met, to people for purchasing new standard share capital in another or existing business. A taxpayer who invests into an approved EII investment can reduce a substantial amount from their taxable income for the year in which the investment was made. The maximum investment allowed is €150,000 per year

The EII Scheme offers one of the few remaining income tax reliefs and is one of the few sources of total income tax relief (which includes, but not limited to, Pension funds, ARF distribution income, Rental income).

What are the Tax Reliefs for all businesses (including partnerships, sole traders, and limited Companies)

The following are tax reliefs offered to businesses of different types, including sole traders, partnerships and limited companies: 

Pre-trading expenditure:  Pre-trade expenses are the expenses you had incurred within seven years of you starting the trade or while you were trading. The calculation begins from the first day of tradingThese tax-deductible business expenditures include expenses, such as buying inventory, equipment, paying rent, getting insurance, marketing, and advertising.

Think about the activity of the business: Certain extra tax relief might be available relying upon the activities of the business – for instance, relief for expenditure on research and development. 

What is the tax relief for companies only?

Companies can also gain some relief from the tax. Following are a few methods through which companies can apply for tax relief:

 Company tax relief: Certain organizations don’t need to pay for corporation tax on their profits, subject to meeting certain conditions, for a timeframe subsequent to starting a business. Note that, the relief does not matter to specific trades, for example, those including the essential production of agricultural items, the preparing and promoting of agricultural products, export-related activities and so forth. Moreover, the relief won’t have any significant bearing where the trade was recently carried on by someone else in the State.

Costs of doing business: You can guarantee a tax relief against your business benefits for some operational expense that you cause entirely and solely for the motivations behind the trade. 

Research and development tax credit: As an impetus for organizations doing certain R&D exercises, a tax credit might be available. Audit your business activities with your tax specialist to check whether you meet all requirements for R&D tax credits.

Losses: Tax treatment of misfortunes is an important region, and tax specialist advice is suggested for this (and, to be sure, for all areas of expense). At last, the relief available for losses will rely upon whether the business is working as a sole broker/organization or through an organization.

Capital allowances: A capital allowance is an expense derivation for expenditure caused by capital hardware, for example, office furniture. It merits checking on your fixed-asset register to check whether you are asserting capital allowances on all passing assets.

IP: Tax relief is available for capital use acquired by organizations on an expansive scope of intangible assets, including trade names, brands, know-how, publishing titles, copyright and goodwill specifically derived from those intangibles.

To check whether you are eligible, speak to the advisors here. 




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