Ireland: Reviews and audits | Research Credit Integrity Alliance

This page describes how Revenue selects and reviews claims for the research and development (R&D) corporation tax credit. Revenue examines R&D claims within its general compliance framework, set out in the Code of Practice for Revenue Compliance Interventions, and applies two tests specific to the credit: the science test and the accounting test.

Claims can be examined after payment

Section 766C(16) of the Taxes Consolidation Act 1997 (TCA 1997) provides that nothing prevents Revenue from examining a claim, and making or amending an assessment, after the credit has been paid or offset.1 Revenue's R&D manual states that no supporting R&D documentation has to be submitted with the return, but that documentation may be requested later to verify that the claim is valid, as with any other corporation tax relief or credit.2

How cases are selected

Revenue's Code of Practice states that, other than a relatively small number of randomly selected cases used to validate the integrity of its risk approach, taxpayers are selected for a compliance intervention based on the presence of various risk indicators.3 The methods it names include REAP, Revenue's electronic risk and analysis system, and real-time risk analytics.3 Revenue states that it applies an expanding range of advanced analytics and data interrogation processes to all data available to it, including data returned by third parties.3

The Code does not set out risk indicators specific to the R&D credit.3

Levels of intervention

The Code sets out a framework of three levels of compliance intervention.3

Level	Interventions	Main features
Level 1	Requests to self-review, reminders, profile interviews, engagement under the Cooperative Compliance Framework	Supports voluntary compliance; the taxpayer can self-correct or make an unprompted qualifying disclosure3
Level 2	Risk review and audit	Risk-based checks ranging from a single issue to a comprehensive audit; a notification letter issues in every case3
Level 3	Revenue investigation	Focuses on high risk practices and cases showing risks of suspected fraud and tax evasion3

Level 2 or Level 3 interventions are not always preceded by a Level 1 intervention: where Revenue identifies a specific risk, it can begin at the level the risk warrants.3 A Level 2 intervention may be desk based or field based, and a field intervention may be conducted by video conference.3

Notice and timing

The taxpayer, and the tax agent on record if any, receive 28 days' notice of a Level 2 intervention, and the notification letter states that the intervention is considered to start 28 days after the date of the letter.3 Once the notification issues, the taxpayer can no longer make an unprompted qualifying disclosure, but can make a prompted qualifying disclosure before the review or audit starts.3 To secure an agreed period to prepare it, the taxpayer must give Revenue written notice of the intention to make a prompted qualifying disclosure within 21 days of the issue of the notification, and may then request a maximum of 60 calendar days, running from the day the notice of intention was given. Revenue confirms the expiry of the 60 day period in writing.3 The effect of disclosures on penalties is covered on the penalties and Revenue code of practice pages.

What Revenue examines in an R&D claim

Revenue's R&D manual states that, in compliance interventions on R&D claims, the two main elements of the claim are the science test and the accounting test.2

Science test. Whether the activities meet the statutory definition of R&D activities: systematic, investigative or experimental activities in a field of science or technology, involving basic research, applied research or experimental development, that seek scientific or technological advancement and involve the resolution of scientific or technological uncertainty.24
Accounting test. Whether the expenditure claimed was incurred on qualifying activities and has been properly tracked and accounted for, including the methods used to apportion costs.2

Revenue states that it will accept a company's cost allocation where it is clear that the management accountant, financial director or an appropriate director with knowledge of the company's documents chose the percentage of costs to be allocated, and the choice is bona fide, reasonable and based on the facts of the claim.2

Independent experts

For the science test, Revenue may consult a person who in its opinion may help it decide whether expenditure was incurred on R&D activities.5 Revenue's procedure states that independent experts should be engaged only where there is doubt that the science test has been met, not to explain the science.6 The expert consultation page explains the process.

Time limits

Revenue may make enquiries to check the accuracy of returns, including a person's entitlement to reliefs and credits. In general, enquiries must be made within four years of the end of the chargeable period in which the return was filed, and an assessment cannot be made or amended after that time where the return contained a full and true disclosure of all material facts.7 The four year limit does not apply where the return did not contain a full and true disclosure, or where a Revenue officer has reasonable grounds for believing that fraud or neglect is involved.7

Outcome of a review

Where an R&D intervention ends in a settlement, Revenue's manual states that penalties apply in line with the legislation and the Code of Practice, and that publication may also apply.2 Where a claim is found not to be authorized, the company may be charged to tax under Case IV of Schedule D on an amount equal to four times the unauthorized amount, with interest from the date the credit was paid or offset.1 Because income chargeable under Case IV of Schedule D is taxed at 25 percent, the tax on that charge equals the unauthorized amount.8 Revenue's Code provides for a review of Revenue's handling of a case and for appeals on liability to the Tax Appeals Commission.3 See penalties and disputes and appeals.

Sources

Revenue Commissioners, Notes for Guidance, Taxes Consolidation Act 1997, Finance Act 2025 edition, Part 29, section 766C, subsections (10) and (16). https://www.revenue.ie/en/tax-professionals/documents/notes-for-guidance/tca/part29.pdf (accessed 11 October 2026). Back
Revenue Commissioners, Tax and Duty Manual Part 29-02-03, Research and Development (R&D) Corporation Tax Credit (last updated April 2026), sections 8, 8.1, 8.2, 8.6.2 and 8.7. https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-29/29-02-03.pdf (accessed 11 October 2026). Back
Revenue Commissioners, Code of Practice for Revenue Compliance Interventions (effective 1 May 2022), sections 1.1, 1.2.2, 1.3, 1.3.1 to 1.3.3, 1.4, 2.10, 2.10.1 and 4.11. https://www.revenue.ie/en/tax-professionals/documents/code-of-practice-revenue-compliance-interventions.pdf (accessed 11 October 2026). Back
Revenue Commissioners, Research and Development Corporation Tax Credit: Pre-filing Notification Form in respect of a claim to be made under section 766C TCA 1997, notes to Section 2. https://www.revenue.ie/en/companies-and-charities/documents/rd-form-766c.pdf (accessed 11 October 2026). Back
Revenue Commissioners, Notes for Guidance, Taxes Consolidation Act 1997, Finance Act 2025 edition, Part 29, section 766, subsection (7). https://www.revenue.ie/en/tax-professionals/documents/notes-for-guidance/tca/part29.pdf (accessed 11 October 2026). Back
Revenue Commissioners, Tax and Duty Manual Part 29-02-05, Research and Development (R&D) Corporation Tax Credit: Appointment of expert to assist in audits (last updated August 2025), section 2.2. https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-29/29-02-05.pdf (accessed 11 October 2026). Back
Revenue Commissioners, Notes for Guidance, Taxes Consolidation Act 1997, Finance Act 2025 edition, Part 41A, sections 959Z and 959AA. https://www.revenue.ie/en/tax-professionals/documents/notes-for-guidance/tca/part41a.pdf (accessed 11 October 2026). Back
Revenue Commissioners, Tax and Duty Manual Part 02-02-02, The charge to and rates of Corporation Tax (last reviewed January 2024), sections 5 and 8, section 21A(3)(a) TCA 1997. https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-02/02-02-02.pdf (accessed 17 October 2026). Back