Ireland’s R&D tax credit reforms are also shaped by the global tax environment. The introduction of the OECD Pillar Two rules means that large multinational groups with consolidated revenue above €750 million are now subject to a minimum effective tax rate of 15% in each jurisdiction where they operate.

Under these rules, some incentives that reduce the local effective tax rate may be offset by top-up tax, depending on how the relief is treated for Pillar Two purposes. By increasing the R&D credit rate from 25% to 30%, and now to 35%, Ireland is strengthening the incentive in a way that can help preserve its attractiveness for large groups in a 15% minimum tax environment. This move helps keep Ireland as a top choice for global investment.

For multinationals, the key question is whether the R&D credit is treated in a way that remains compatible with Pillar Two calculations and preserves the intended benefit. Some professional analyses of the recent Finance Acts note that the higher rate, combined with the credit’s design as a Qualified Refundable Tax Credit (QRTC), helps maintain the attractiveness of carrying out R&D in Ireland.

At a practical level, this means Irish sites can still make a strong internal case for new labs, R&D headcount and high‑value projects. The enhanced rate helps offset higher global tax costs and supports Ireland’s positioning as a location for advanced manufacturing, software development and scientific research.

If you have any questions about R&D tax credits or Grant Funding please get in touch with ABGI Ireland.  A member of our team can help you understand the best options for your specific circumstances.

ABGi Ireland works with Irish and international groups to map the interaction between the R&D tax credit, Pillar Two rules and local corporation tax. We partner with in‑house tax and finance teams to quantify the net benefit and ensure claims are structured and documented in a way that stands up both to Revenue scrutiny and to global group reporting requirements.