That is what I thought but I cannot seem to get a definitive answer.
It is also the case that if there is insufficient corporation tax liability, then the credit can be offset against PAYE and PRSI paid in the year. This is a direct cash refund from revenue.
I might give the revenue a call.
Thanks, Pat. That's a fairly clear summary.
However, the question still remains as to the accounting treatment.
The case I have is where the credit will be offset against PAYE/PRSI ( No corporation tax has been paid nor will for a few years due to losses forward)
As this is a direct credit against a P & L expense, I suspect it will hsve to be added back to profits (or reduce losses) in the CT computation and eventually 50% of the credit will be clawed back in corporation tax.
I remember coming across an ICAI document in which the authors outlined the idea of treating the R&D credit as a government grant =>
Debit CT liability account
Credit Government grant (income) account
with the amount of the recognised credit for the period.
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