Starting a business in Ireland comes with plenty of financial hurdles — from securing funding to managing early operational costs. Fortunately, Ireland offers several tax reliefs and funding supports to help new businesses grow. Whether you’re launching a café, a tech firm, or a digital agency in Dublin, these schemes can reduce your tax burden, free up cash flow, and reward investment in innovation.
Corporation Tax Relief for Start-Ups (Section 486C)
Under Section 486C of the Taxes Consolidation Act 1997, new trading companies can claim corporation tax relief for their first five years of operation. This applies to companies that begin trading between 1 January 2009 and 31 December 2026.
Key details:
- Full relief for corporation-tax liabilities up to €40,000 per year.
- Marginal relief for liabilities between €40,000 and €60,000.
- Relief is linked to employer’s PRSI paid, rewarding job creation.
- Relief applies only to profits and gains from the new trade.
- Unused relief may be carried forward if profits are insufficient.
This incentive directly eases the financial strain during a start-up’s early years, when most profits are reinvested back into the business.
Income Tax Refunds for Entrepreneurs — The SURE Scheme
The Start-Up Refunds for Entrepreneurs (SURE) scheme allows entrepreneurs who invest in their own start-ups to reclaim income tax paid over the previous seven years.
To qualify:
- You must have primarily PAYE income for at least four of the last years,
with non-PAYE earnings below €50,000. - Your company must be an SME engaged in relevant trading or R&D activities.
- Relief applies to investments of €250 – €140,000 per year, with unused relief carried forward.
This scheme is ideal for founders leaving employment to start a business, as it effectively channels past income-tax payments into new enterprise funding.
Employment Investment Incentive (EII)
The Employment Investment Incentive (EII) encourages individuals to invest in Irish trading companies in exchange for income-tax relief.
- Companies may raise up to €5 million per year, with a lifetime limit of €15 million.
- Investors can claim relief on up to €500,000 (held 7 years) or €250,000 (held 4 years).
- Full relief is available in the year of investment for shares issued after 8 October 2019.
- Investors and their families cannot own existing shares in the company.
The EII has become central to Ireland’s start-up funding landscape, giving early-stage companies access to private capital while offering investors substantial tax incentives.
Pre-Trading Expense Deductions
Before trading officially begins, many businesses incur unavoidable costs. The Irish tax code allows deduction of qualifying pre-trading expenses once trading commences.
Eligible costs include:
- Legal and accounting fees
- Market research and feasibility studies
- Business-plan preparation
These expenses must be incurred within three years before trading starts, and only the business-related portion is deductible. This relief helps founders recover start-up costs when early profits arrive.
Accelerated Capital Allowance (ACA)
Through the Accelerated Capital Allowance scheme, companies can deduct 100 % of the cost of energy-efficient equipment in the year of purchase.
Unlike standard wear-and-tear allowances spread over eight years, ACA offers full first-year relief, provided the equipment is new, energy-efficient, and used directly in trade (not leased out).
This incentive lowers taxable profits and promotes investment in sustainable business operations.
Knowledge Development Box (KDB)
The Knowledge Development Box (KDB) rewards companies generating income from intellectual property developed in Ireland.
Profits from qualifying IP are taxed at a 6.25 % corporation-tax rate, roughly half the standard 12.5 %. For R&D-focused start-ups—such as those developing software, biotech, or patented products—the KDB can significantly reduce tax burden and encourage further innovation.
Local Enterprise Office (LEO) Supports
Ireland’s Local Enterprise Offices provide practical, non-repayable support alongside tax reliefs.
- The Priming Grant assists start-ups with costs during their first 18 months.
- The Feasibility Study Grant funds market research and prototype development.
LEOs also offer mentoring and training programmes—vital for small businesses seeking guidance in their initial stages. Unlike tax reliefs claimed retrospectively, LEO grants deliver upfront cash support.
Enterprise Ireland Funding
For scalable, innovation-driven start-ups, Enterprise Ireland provides tailored funding through several programmes.
- The High Potential Start-Up (HPSU) programme offers up to €1.2 million via the Innovative HPSU Fund and a Feasibility Study Grant for developing investor-ready business plans.
- The New Frontiers Programme provides training, mentoring, and seed funding for early-stage entrepreneurs.
Together, these initiatives form the backbone of Ireland’s state support for high-growth enterprises.
Intellectual Property (IP) Tax Relief
Companies investing in qualifying intangible assets—patents, trademarks, software—can claim capital allowances for intangible assets under Section 291A TCA 1997.
Expenditure on acquiring or developing such assets may be deducted against profits, provided it meets Revenue’s definition of a qualifying intangible asset. This is particularly beneficial for start-ups building technology or proprietary software IP.
Digital Gaming Tax Credit
The Digital Games Tax Credit supports Ireland’s growing gaming sector by offering a 32 % credit on qualifying development expenditure.
Eligible games must be interactive, use digital technology, and be certified by the Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media.
Expenditure linked to design, production, and testing qualifies, while projects focused on advertising or gambling do not.
If a company’s corporation-tax liability is less than the credit amount, the balance can be refunded in cash, offering direct financial relief to developers.
Ireland’s broad range of tax reliefs and supports helps start-ups grow and thrive.
Ireland’s combination of tax reliefs, grants, and funding programmes reflects its ongoing commitment to entrepreneurship and innovation. From Section 486C start-up relief to R&D-focused schemes like the KDB and Digital Games Tax Credit, the system provides flexible supports for every stage of growth.
Whether you’re launching a product, scaling exports, or running a digital agency in Dublin, understanding and claiming these reliefs can help turn your idea into a sustainable, competitive business.
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