Skip to main content

Global investments and innovations incentives (Gi3)

Finance Bill 2024

New measures not announced in Budget 2025 

 

R&D tax credit: As outlined in Budget 2025, the finance bill confirmed the increase in the first instalment for smaller claimants from €50,000 to €75,000, which will come into effect for accounting periods commencing after 1 January 2025. Larger claimants (€150k+) the first instalment will remain at 50% of the claimed amount.

Film Tax Credit: While still subject to European Commission approval, the Finance Bill outlines new legislation to enable an 8% uplift on the existing 32% tax credit for feature films to enable a 40% credit for feature films with a maximum qualifying expenditure of €20 million.

Tax Credit for Unscripted Production: New legislation has been drafted to provide a new tax credit for eligible unscripted productions. A 20% tax credit on expenditure up to €15 million can be attained. The bill also sets out qualifying criteria that must be achieved, specifically a culture test to ensure that the production is supporting Irish and European culture. This incentive is also subject to State aid approval from the European Commission before it can be commenced.

What was unexpected?

 

We had hoped that the Finance Bill would have made a number of amendments to specific aspects of the R&D tax credit to make it more competitive internationally and changes to 481A relief for investment in digital games to enable companies to benefit from this scheme. However, there were no new measures that had not been outlined.

Failure to amend these schemes means that Ireland’s competitiveness as a location for investment for significant innovative projects may wane as other countries outside of EU state aid rules continue to offer more attractive investment incentives.

Who will be affected?

 

Changes to the R&D tax credit will benefit smaller companies and startups who can benefit from increased cashflow through R&D tax credit.

For the Film Tax Credit and Tax Credit for Unscripted Production, upon confirmation of European Commission approval, the film and television production industry will benefit with Ireland becoming a more attractive location for investment in this area.

When? What to do now?

 

Changes to the R&D tax credit will come into effect for accounting periods after 1 January 2025.

For the new Tax Credit for Unscripted Production and the Film Tax Credit, we await European Commission approval for the schemes. However, we would recommend evaluating the potential benefit from the schemes.

Our view

 

  • We welcome the introduction of the new Tax Credit for Unscripted Production and the amendments to the Film Tax Credit, which will play an important role in securing further investment in Ireland.
  • However, the lack of meaningful amendments to the R&D tax credit and specifically the Relief for Investment in Digital Games is disappointing. Innovation and games development represent important areas for indigenous and FDI investment.
  • Developing an ecosystem of incentives that can continue to support and attract investment is critical for Ireland to continue to build a knowledge-based economy.
  • With changes in EU State aid rules and Pillar 2 we are seeing increased global competition for investment from other countries both within and outside the EU. 
  • It is essential that Ireland continues to be a world leader in the development of incentives that can support future investment in targeted industries.

Much like the preceding budget, the finance bill represents a missed opportunity. It has failed to provide businesses with any meaningful incentives to further support investment that will result in increased innovation or growth. Failure to further evolve and enhance these incentives will see Ireland lose future indigenous and foreign investment.

Did you find this useful?

Thanks for your feedback

If you would like to help improve Deloitte.com further, please complete a 3-minute survey