Ireland’s start-up Corporation Tax relief is one of the most useful tax questions for a new company beginning to trade in 2026. It can reduce the Corporation Tax payable by a qualifying company during its early trading period, but it is not an automatic benefit of registering an Irish LTD.
Revenue’s current guidance says the relief is available for qualifying companies that set up and begin trading on or before 31 December 2026, subject to the conditions. This guide explains who may qualify, how the limits work, what can disqualify a company and how to prepare the claim through the Corporation Tax return. It is general information, not a tax calculation or confirmation that a particular company qualifies.
Quick answer
- The company must be new enough, start a qualifying trade within the relevant period and meet the detailed conditions.
- Revenue describes full relief where total Corporation Tax payable does not exceed €40,000.
- Marginal relief may apply where Corporation Tax payable is more than €40,000 but less than €60,000.
- The amount is linked to Employer PRSI for the company’s employees and directors, subject to a per-person limit.
- Some transferred, connected, passive, land, extraction and service-company activities are excluded.
- The company claims the relief through its Corporation Tax return; incorporation does not claim it automatically.
What is Irish start-up Corporation Tax relief?
The relief is designed to support certain new trading companies during their first years of business. Rather than giving every new company a fixed tax-free allowance, the legislation reduces Corporation Tax by reference to the company’s liability and qualifying employment-related contributions.
This means the relief is generally more valuable to a genuine operating business that employs people or pays qualifying remuneration than to a dormant company or a company that only holds investments. A company can be incorporated, own a bank account and have a website without satisfying the conditions for a qualifying trade.
Who can qualify in 2026?
Revenue’s current guidance identifies the main starting conditions. A company must generally be incorporated on or after 14 October 2008 and be set up and begin trading between 1 January 2009 and 31 December 2026. The trade must be a qualifying trade and the company must stay within the relevant Corporation Tax limits.
“Start trading” should be treated as a real commercial milestone, not simply the date on the Certificate of Incorporation. Keep evidence such as the first customer contract, first invoice, first sale, first delivery or other records showing when the new trade actually began.
Read Revenue’s current start-up company tax relief guidance before relying on a summary from another website.
How the €40,000 and €60,000 limits work
Revenue describes full relief where the company’s total Corporation Tax payable for an accounting period does not exceed €40,000. Where the amount is more than €40,000 but less than €60,000, marginal relief may be available. The figures are thresholds for the relief calculation, not a promise that a company with €40,000 of tax liability receives €40,000 back.
The tax computation still needs to determine the company’s taxable trading profit, allowable deductions, capital allowances, losses and any other relevant adjustments. The relief is then applied within the statutory limits. It should not be estimated by multiplying turnover by a percentage.
| Corporation Tax payable | General position |
|---|---|
| Up to €40,000 | Full relief may be available, subject to the qualifying trade, Employer PRSI and other conditions. |
| More than €40,000 and less than €60,000 | Marginal relief may reduce the benefit as the liability approaches the upper threshold. |
| €60,000 or more | The start-up relief may not be available for that accounting period under the stated limits. |
How Employer PRSI affects the relief
The relief is connected to Employer PRSI paid by the company for its employees and directors. Revenue’s tax manual describes a limit of €5,000 per individual for the relevant accounting period. The amount of relief therefore depends on the company’s actual employment and payroll facts, not only on its Corporation Tax bill.
Keep payroll records, Employer PRSI reports, director remuneration details and payment evidence together with the tax computation. A company should not assume that every payment to a contractor is equivalent to employment for this relief. Employment status and payroll treatment need to be correct independently.
Which trades may be excluded?
Revenue identifies a number of exclusions. The relief can be unavailable where the company takes over a trade previously carried on by someone else, continues an existing activity through a connected structure, or carries on certain excluded sectors. Examples in the current guidance include land development, petroleum or mineral exploration and extraction, certain service-company activities and specified primary production activities.
This is important for reorganisations. Creating a new company does not necessarily create a new qualifying trade if an existing business is transferred into it. Before incorporation, document what the company will sell, who will perform the work, which assets are transferred and whether an existing trade is being continued.
A software company, consultancy, e-commerce business or agency may have a qualifying activity, but the label alone is not enough. The full facts and the current legislation must be reviewed.
How to claim the relief
- Form the company and record the company number, constitution and ownership information.
- Describe the intended trade and check whether it is genuinely new and qualifying.
- Register the company for Corporation Tax and any other required Revenue taxes.
- Keep accounts, payroll, Employer PRSI, sales and expense records from the first trading day.
- Prepare the Corporation Tax computation for the accounting period.
- Check the €40,000 and €60,000 thresholds and the Employer PRSI limits.
- Claim the relief in the relevant Corporation Tax return and retain the supporting calculation.
- Review the claim again if the company changes its trade, transfers activities or becomes connected with another company.
The claim belongs in the company’s tax compliance process. A formation agent can help create the company, but tax relief eligibility and the CT1 computation should be handled with an accountant or tax adviser where the facts are complex.
Common mistakes
- Assuming every new company automatically receives relief.
- Using the incorporation date instead of the genuine trading start date.
- Calling an existing trade a “new business” after moving it into a new company.
- Confusing turnover, accounting profit and taxable Corporation Tax liability.
- Ignoring Employer PRSI and the €5,000 per-person limit.
- Claiming without keeping evidence of customers, work, payroll and commercial activity.
- Forgetting that connected companies and transferred activities can affect eligibility.
What should founders do before 31 December 2026?
If your business is still at planning stage, decide whether it will genuinely begin a qualifying trade before the current deadline. Do not rush into an artificial transaction simply to pursue relief. A real launch plan, appropriate contracts, accurate payroll and reliable accounting records matter more than a deadline-driven incorporation.
If the company will be formed by an overseas founder, review the Irish company for non-residents guide and the non-resident director bond guide. Tax residence and management should be reviewed in Ireland and in the founder’s home country.
Related tax and formation guides
Read our Ireland Corporation Tax rates guide, Corporation Tax registration guide and Irish company tax registration checklist before the first return is due.
Form your Irish company with the next steps in mind
Start an Irish company formation, compare formation packages or use our non-resident formation service when you need help with the CRO stage before tax registration and filing.