Ireland’s Department of Finance has published the Research and Development Tax Credit and Innovation Compass, outlining the 2025 review of R&D tax incentives and innovation supports, recent legislative changes, and areas for medium-term policy review.
Ireland’s Department of Finance has released the Research and Development Tax Credit and Innovation Compass on 16 February 2026, setting out the work completed in 2025 to review the R&D tax credit regime and related innovation supports.
The Compass explains the Government of Ireland’s longer-term approach to R&D incentives. It traces the development of the tax credit and highlights recent changes, including an increase in the credit rate to 35% and higher limits for immediate cash repayments.
Looking forward, the document identifies areas for further review over the medium term. These include rules on sub-contracting, the treatment of capital expenditure on R&D facilities, and options to simplify administrative requirements.
The Department states that R&D tax credits remain central to Ireland’s efforts to stay competitive internationally, attract foreign direct investment, and support innovation and growth, particularly among small and medium-sized enterprises. The Innovation Compass is intended to provide a structured basis for ongoing consultation and policy development.
