Every year we meet new clients who have been paying significantly more Irish tax than they need to — not through evasion or aggressive schemes, just through under-use of mainstream legislation. Below are the ten reliefs and strategies that, used in combination, routinely cut tax bills by 20–40% for the SMEs and sole traders we work with.
None of this is exotic. None of it is risky. It's all written into the Taxes Consolidation Act 1997 and Revenue's published manuals. The only common factor: you have to actively claim it.
1. Maximise pension contributions
The single highest-ROI Irish tax relief. Employee/self-employed contributions are limited by age (15% under 30; 20% in your 30s; 25% in your 40s; 30% at 50–54; 35% at 55–59; 40% at 60+) and capped by a €115,000 earnings ceiling. Employer (company) contributions to a director's executive pension are unlimited within reasonable proportion to remuneration — a quirk that lets profitable company directors shift large amounts into tax-free pension growth.
A €30,000 employer pension contribution by a small company saves €3,750 corporation tax, and the director pays no BIK. The fund grows tax-free; 25% is tax-free at retirement up to €200,000.
2. Claim all available capital allowances
Capital allowances are the tax equivalent of depreciation. Most assets attract 12.5% straight-line over 8 years. But:
- Energy-efficient plant attracts 100% accelerated capital allowance in year 1 (see the SEAI Triple-E list)
- Industrial buildings and certain hotel/tourism structures have specific rates
- Intangible assets (software, IP) have specific rules under s.291A
We routinely uncover unclaimed capital allowances when new clients arrive — five-figure tax saves in year one are common.
3. R&D Tax Credit (30%)
If you're developing new or improved products, processes, software or services and there's genuine technical uncertainty, you may qualify for the 30% R&D tax credit. It's not just for biotech and chip design — it applies to many SaaS, fintech, manufacturing, food and engineering SMEs. The credit reduces corporation tax payable, and if the company has no tax to offset, it's refunded over three years.
4. Employment and Investment Incentive (EII)
For raising growth capital, EII offers investors 40% tax relief on investments up to €500,000 per year. From the company's side, EII can raise meaningful equity without diluting control as severely as venture capital. The compliance requirements are real but manageable; we've helped clients raise from €100k to €1m+ via EII.
5. Family employment
If a spouse, civil partner or adult child genuinely works in the business, paying them a market-rate salary shifts income from your higher tax band into their (usually lower) one. Critical caveat: the work must be genuine and the salary must be commercially defensible. Revenue scrutinises family payroll heavily — keep timesheets, contracts and evidence of work performed.
6. Incorporate (when the numbers stack up)
Sole-trader marginal tax over €42,000 is roughly 52% (income tax + USC + PRSI). Trading company corporation tax is 12.5%. The catch: when you extract money from the company as salary or dividend, you pay personal tax on the way out. The math favours incorporation strongly when profit consistently exceeds €60,000–€80,000 and you don't need to draw all of it personally.
7. Section 481 (film & TV) and digital tax credits
Niche but lucrative if you qualify. Section 481 offers up to 32% credit on qualifying film and TV production spend. The Digital Games Tax Credit launched in 2022 offers similar relief for game development. Specialised — but worth a conversation if you're in those sectors.
8. Time income and expenses around year-end
If you're approaching a higher band, push invoices into the new year and bring forward deductible expenditure (asset purchases, repairs, pension top-ups) into the current year. Companies have similar levers around year-end. Coordinated planning over a 2–3 year horizon can keep marginal tax rates lower year after year.
9. Use the right business structure for property income
Rental income inside a trading company attracts a 25% non-trading rate plus close-company surcharges on undistributed profits — usually a worse outcome than holding rentals personally or via a separate non-trading structure. If you have significant property income mixed with trading income, ask about a holding structure or de-merger.
10. Claim every personal relief
Easily forgotten:
- Earned Income Tax Credit (self-employed) — €2,000
- Home Carer Credit — up to €1,950
- Medical expenses — 20% relief
- Nursing-home fees — 40% relief
- College tuition fees — 20% relief on qualifying courses
- Flat-rate employment expenses — sector-specific (€85 to €700+)
- Rent Tax Credit — €750/year (single)
- Mortgage Interest Tax Credit (where still available)
Want an audit of what you're claiming?
A 60-minute structured review usually surfaces €2,000–€8,000 of annual tax savings for a typical SME. Fixed-fee, no obligation.
Book Tax Review Planning Service