MAZARS RESEARCH & DEVELOPMENT TAX CREDIT

November 2013

ABOUT MAZARS

71 Countries

More than

13,500 Employees

Strong Focus on Client Service

Deep Knowledge and Understanding of Tax

Reliefs

Strong Focus on Adding Value

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

ABOUT MAZARS: GLOBAL, INTEGRATED, TRUSTED

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

INTRODUCTIONWHAT’S IT ALL ABOUT?01

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

WHAT IS R&D?

02

WHAT IS R&D?

• Seeking to achieve a

• Scientific or Technological Advancement

• Seeking to resolve a

• Scientific or Technological Uncertainty

• Failed attempts

WHAT ACTIVITIES QUALIFY?03

WHAT ACTIVITIES QUALIFY?

prototyping design trials

testing moulding workings

drawings failed attempts

recipes blending reaction

extensive testing process &

output performance Stabilitycontrol

first batch scale up production

clinical trials process &

output improvements

Algorithm & OSdevelopment statisticaldata management generic

software improvements

Qualifying Activities

Some …. Qualifying Activities

WHO CAN QUALIFY?

04

WHO CAN QUALIFY?

• Companies within charge to Irish Corporation Tax

• MNC's & Large International Groups

• SME's & Owner Manager Businesses

WHO CAN QUALIFY?

Traditional R&D Activities

• Research & Development Companies

• Laboratory Operations

• Pure Research

• Product Development

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

HOW TO CLAIM THE CREDIT?05

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

HOW MUCH TO CLAIM?

06

HOW MUCH TO CLAIM?

• Wages & Salaries

• Direct Costs

• Capital Expenditure

• Indirect Costs

• Subcontractors & Universities

HOW MUCH TO CLAIM?

Expenditure

Direct Staff Costs

Raw Materials

Direct Over-heads

Computer Software &

Hardware costs

Sub Contracted R&D Costs

(Rules)

Plant & Machinery

Buildings (Special

Improved Rules Apply)

Fixtures & Fittings

Other ?

HOW TO USE THE CREDIT?07

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

HOW TO USE THE CREDIT?

Loss Making Companies - Nil Corporation Tax

• Refunded as three Annual Instalments

or

• Carry forward to offset future Corporation Tax

SUMMARY - KEY POINTS08

SUMMARY - KEY POINTS

• 25% Tax Credit

• In addition to normal Corporation Tax deduction

• White Coat & non White Coat Activities

• Particular opportunities in software and manufacturing

• Credit has a Cash Value and is readily convertible

• 12 Month window to make a claim

• All 2012 claims must be before 31 December 2013.

SUMMARY - KEY POINTS

• STA & STU – Cut off

• Revenue Commissioners Intervention

• Use of suitability qualified experts

• Expenditure; wholly & exclusively

mazars.ie

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