20131112 Mazars R&D Tax Credits_Gerry Vahey

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With over 30 years experience, Mazars Ireland is a leading professional services firm. Our services include audit and assurance, consultancy, corporate finance and taxation services. We have a broad client base spanning the corporate, governmental and institutional sectors along with owner-managed businesses and private wealth.
Mazars Ireland is based in Dublin and Galway with a staff of over 200 people and is part of the integrated international firm, Mazars. A young, growth oriented and ambitious firm, Mazars gives employees the opportunity to work across a wide variety of markets and sectors.

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20131112 Mazars R&D Tax Credits_Gerry Vahey

  1. 1. MAZARS RESEARCH & DEVELOPMENT TAX CREDIT November 2013
  2. 2. ABOUT MAZARS Strong Focus on Adding Value More than 13,500 Employees 71 Countries Strong Focus on Client Service Deep Knowledge and Understanding of Tax Reliefs
  3. 3. ABOUT MAZARS: GLOBAL, INTEGRATED, TRUSTED Ireland: 18 Partners and over 225 professional staff Globally: over 850 partners and 13,500 professional staff in 72 countries Joint ventures and representative offices in a further 21 countries
  4. 4. TABLE OF CONTENTS • Introduction - What's it all about? • What is R&D? • What Activities Qualify? • Who can Qualify? • How to Claim the Credit? • How Much to Claim? • How to Use the Credit? • Summary - Key Points
  5. 5. 01 INTRODUCTION WHAT’S IT ALL ABOUT?
  6. 6. INTRODUCTION - WHAT'S IT ALL ABOUT? • R&D Credit - 25% of Expenditure incurred • Generous Relief - Reward Innovation • Introduced in 2003 • Complete overhaul in 2009 • Ongoing Budgetary improvements to R&D Credit • Signals continuing & long term intention • Supported by successive Governments
  7. 7. 02 WHAT IS R&D?
  8. 8. WHAT IS R&D? • Seeking to achieve a • Scientific or Technological Advancement • Seeking to resolve a • Scientific or Technological Uncertainty • Failed attempts
  9. 9. 03 WHAT ACTIVITIES QUALIFY?
  10. 10. WHAT ACTIVITIES QUALIFY? Some …. Qualifying Activities prototyping design trials testing moulding workings drawings failed recipes blending reaction extensive testing process & output performance Stability control attempts Qualifying Activities first batch scale up production clinical trials process & output improvements Algorithm & OS development statistical data management generic software improvements
  11. 11. 04 WHO CAN QUALIFY?
  12. 12. WHO CAN QUALIFY? • Companies within charge to Irish Corporation Tax • MNC's & Large International Groups • SME's & Owner Manager Businesses
  13. 13. WHO CAN QUALIFY? Traditional R&D Activities • Research & Development Companies • Laboratory Operations • Pure Research • Product Development
  14. 14. WHO CAN QUALIFY? Non Traditional R&D Activities Software Development Software Houses Use in Own Trade Manufacturing / Process Development Mazars Experience - Vast potential in these areas
  15. 15. 05 HOW TO CLAIM THE CREDIT?
  16. 16. HOW TO CLAIM THE CREDIT? • Submission to Revenue Commissioners: • • • Corporation Tax return - 9 Months after year end, or Written submission - 12 Months after year end. Warning - Very tight window to claim • 31 December 2012 must be claimed before 31 December 2013
  17. 17. 06 HOW MUCH TO CLAIM?
  18. 18. HOW MUCH TO CLAIM? • Wages & Salaries • Direct Costs • Capital Expenditure • Indirect Costs • Subcontractors & Universities
  19. 19. HOW MUCH TO CLAIM? Expenditure Direct Staff Costs Plant & Machinery Buildings (Special Improved Rules Apply) Raw Materials Sub Contracted R&D Costs (Rules) Fixtures & Fittings Direct Overheads Computer Software & Hardware costs Other ?
  20. 20. 07 HOW TO USE THE CREDIT?
  21. 21. HOW TO USE THE CREDIT? Profitable Companies - paying Corporation Tax Reduce current year Corporation Tax Refund of prior year Corporation Tax Surrender to a Key Employee Excess • Carry forward to offset future Corporation Tax • Refunded by reference to Payroll Taxes paid
  22. 22. HOW TO USE THE CREDIT? Loss Making Companies - Nil Corporation Tax • Refunded as three Annual Instalments or • Carry forward to offset future Corporation Tax
  23. 23. 08 SUMMARY - KEY POINTS
  24. 24. SUMMARY - KEY POINTS • 25% Tax Credit • • White Coat & non White Coat Activities • • Particular opportunities in software and manufacturing Credit has a Cash Value and is readily convertible • • In addition to normal Corporation Tax deduction 12 Month window to make a claim All 2012 claims must be before 31 December 2013.
  25. 25. SUMMARY - KEY POINTS • STA & STU – Cut off • Revenue Commissioners Intervention • Use of suitability qualified experts • Expenditure; wholly & exclusively
  26. 26. Mazars is present in 5 continents. CONTACT Mazars Harcourt Centre Block 3, Harcourt Road Dublin 2, Ireland Tel: +353 (01) 4494400 Email: mazars@mazars.ie Gerry Vahey gvahey@mazars.ie (01) 449 6423 James Hughes jhughes@mazars.ie (01) 449 6476 mazars.ie

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