Early refunds of R&D tax credits
In another welcome measure Revenue have announced that early payments are available for excess R&D tax credits that are due to be paid in 2020. Any company in an R&D tax credit refund position should avail of this opportunity to maximise cash flow.
Given the exceptional circumstances of the COVID-19 pandemic, Revenue have agreed to expedite the payment of any installments of excess R&D tax credit that are due to be paid in 2020. For eligible companies, the refunds due in 2020 would include:
- The final installment in respect of FY 2017
- The second installment in respect of FY 2018
- The first installment for FY 2019.
Once the form CT1 for 2019 is submitted, a request can be made via MyEnquiries to expedite the refund. Repayments will be processed even if iXBRL accounts have not been filed – the iXBRL accounts information should be filed as soon as possible.
Companies with a year end up to March 2020 would also be entitled to a refund in 2020 and are therefore entitled to avail of the new measures.
Please contact you usual RBK team if you wish to submit
- Your corporation tax return for 2019 early to avail of the early refund mechanism.
- Expedite March 2020 accounts/tax returns
Preliminary Tax Payments
Large companies (with corporation tax liabilities in excess of €200,000 in the prior year) must make a payment on account of preliminary tax in the 6th month of the accounting year. This payment can be based on 50% of the prior year liability or 45% of the estimated current liability. For companies impacted by the Covid 19 crisis, a payment based on current year position may be preferable. Companies with a December year end are due to make preliminary tax payments on 23rd June 2020.
Loss making entities
Companies that have incurred losses should expedite the filing of tax returns so a claim can be made to utilise this loss against prior year profits.
Presence in the State or outside the State resulting from COVID-related travel restrictions
A taxable presence for corporation tax purposes can be triggered by an individual’s presence in a State, in certain circumstances. Where such presence results from Covid-19 travel restrictions Revenue will:
- Disregard such presence in the State for corporation tax purposes and
- if an individual who would otherwise have been present in the State is present in another jurisdiction, Revenue will disregard such presence outside the State for corporation tax purposes
The individual and the company should maintain a record of the facts and circumstances of the bona fide relevant presence in the State, or outside the State, for production to Revenue if evidence that such presence resulted from COVID-related travel restrictions is requested.
How RBK can help?
If you need assistance to avail of any of the above measures or wish to discuss in confidence, please contact your usual RBK contact or:
- Jackie Masterson, Tax Partner
- Patrick Fannon, Senior Tax Manager