Revenue Note for Guidance

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Revenue Note for Guidance

766B Limitation of tax credits to be paid under section 766 or 766A

Summary

The section places a limit on the amount of credit that can be paid to a company under sections 766(4B) and 766A(4B).

Details

Definitions

(1) “payroll liabilities” are defined as-

  • (1)(a) the amount of income tax which the company is required, by or under Chapter 4 of Part 42, to remit to the Collector-General for that period in respect of emoluments, as defined in section 983, paid to, or on account of, all employees and directors, and
  • (1)(b) the amount of Pay Related Social Insurance Contributions in respect of the reckonable earnings and reckonable emoluments of all directors and employees which the company is required to remit to the Collector-General for that period by or under the Social Welfare Acts, and
  • (1)(c) any other levies the company is required to remit to the Collector-General, for that period, in respect of directors and employees.

(2) For the purpose of subsection (1), Pay Related Social Insurance is further defined to include Pay Related Social Insurance Contributions payable under the Social Welfare Acts, Health Contributions payable under the Health Contributions Act 1979, and levies payable under the National Training Fund Act 2000.

(3) Where a company makes a claim under section 766(4B) or section 766A(4B) the amount that can be paid by the Revenue Commissioners under those sections is restricted to the greater of-

  • (3)(a) The corporation tax payable by the company for accounting periods ending in the 10 years prior to the period for which the company can make a claim under sections 766(4A) and 766A(4A), or
  • (3)(b) The payroll liabilities for the aggregate of the period in which the expenditure giving rise to the claim under sections 766(4B) and 766A(4B), is incurred and the immediately preceding accounting period.
  • (3)(c) For a relevant micro or small sized company twice, the payroll liabilities for each income tax month which forms part of the relevant accounting period in which the R&D expenditure was incurred.

Relevant Date: Finance Act 2019