Start-Up Tax Relief 2026: What Every Irish Founder Should Know

Published: December 2025
Author: Amergin Consulting Ltd.
Target Audience: Business Owners, Finance Managers, and Small Business Seeking Financial Stability
Book a meeting: https://calendly.com/amergin-group_free/30min

Every entrepreneur launching a business in Ireland knows there’s more to building a company than just a great idea and hard work. There are numbers to run, compliance to manage, cashflow to monitor, and tax obligations to plan for. That’s why the tax environment for start-ups can make or break early success and why the relief scheme offered by the Revenue Commissioners for new start-up companies deserves serious attention.

If you start a company between 1 January 2009 and 31 December 2026, and meet certain conditions, you may qualify for significant relief from Corporation Tax (CT) under the “Start-Up Relief for New Start-Up Companies” scheme. Revenue+2Revenue+2

Here’s how it works and how clever planning right now can give your business the breathing space it needs to survive and grow.

What is Start-Up Tax Relief?

Under the legislation (commonly referred to as “Section 486C”), new companies can reduce their Corporation Tax liability for the first five years they trade (the “relevant period”). Revenue+2Revenue+2

Relief applies to profits from your qualifying trade — and even to chargeable gains made on disposal of assets used in that trade. Revenue+1 The relief depends primarily on how much you pay in employer’s / director’s PRSI contributions. For each employee or director, the company’s qualifying PRSI is capped at €5,000 (per person) — and there is an overall annual cap of €40,000 qualifying PRSI used to calculate relief. Revenue+1

If your total CT liability in a year doesn’t exceed €40,000, you could reduce it by the full amount of qualifying PRSI. If CT is between €40,000 and €60,000, marginal relief applies. Revenue+1

In short: the more legitimate payroll (and related PRSI) you report early on — and the more compliant your structure — the greater the tax saving, which can be substantial in the foundation years of your business.

Why It Matters  Especially in 2026

For many start-ups, the early years are lean, risky and cash-constrained. Sales can be unpredictable, overheads can mount, and unexpected expenses — VAT, payroll compliance, R&D, investment in tools or software — can erode cash rapidly.

In that context, CT relief buys you time. It improves cashflow. It gives you a runway to grow. It reduces pressure. It lets you reinvest profits when margins are thin.

As 2026 brings rising labour costs, increased compliance burdens, changing payroll and PRSI rules, and overall economic uncertainty in Ireland — this relief becomes more valuable than ever. For a start-up in Dublin or elsewhere, that extra margin of safety could be the difference between staying afloat and tipping into financial stress.

Who Qualifies and What to Watch Out For

Not every company qualifies. To be eligible:

  • The company must be incorporated on or after 14 October 2008. Revenue+1

  • The trade must start between 1 January 2009 and 31 December 2026. Revenue+1

  • The trade must be a “qualifying trade.” Some trades are excluded (for example, certain property-development or land-dealing trades). Revenue+1

  • CT liability must be €40,000 or less (for full relief); marginal relief applies up to €60,000. Revenue+1

  • The company must pay employer’s or director’s PRSI properly. Qualifying PRSI (capped per person) is the basis for relief. Revenue+1

If you meet these conditions, unused relief (for example, if your profits are low in early years) can be carried forward. Revenue+1

How Much Can You Save?  Illustrated Example

Suppose you start a small IT consultancy in Dublin. In your first profitable year, your CT liability on profits is €25,000. You have two employees including yourself as director, and your qualifying employer’s PRSI (or relevant Class S PRSI, from 2025 rules onward) amounts to €12,000 (under the €5,000/person cap and overall cap).

Because your CT liability is under €40,000, you can claim full relief equal to the qualifying PRSI reducing your CT liability from €25,000 to €13,000. That’s a substantial cash saving for a start-up which you can reinvest into growth, marketing, hiring or working capital.

Even if the business grows and profit rises, you may still be eligible for marginal relief for CT between €40,000 and €60,000, so you’re not penalised for early success, though savings are more limited. Revenue+1

What Happens After Five Years?

The relief applies only for the first five years of trading (the “relevant period”). After that, your company pays Corporation Tax at the standard rate on profits, with no further start-up relief. Revenue+1

However any unused qualifying PRSI relief (for example from early lean years or low profits) can be carried forward and used later, subject to the original caps and conditions. Revenue+1

This structure encourages early investment in payroll, hiring and growth which helps build stable foundations for the company.

Beyond CT Relief: Other Supports & Why Start-Ups Should Combine Them

While Start-Up CT Relief is the headline incentive for new businesses, Ireland’s start-up ecosystem includes other supports that — properly combined — can significantly improve cashflow, reduce risk and accelerate growth.

For example:

  • The Start-Up Refunds for Entrepreneurs (SURE) scheme can provide personal income-tax relief to individuals who investiIn their own company, helping founders fund their early business needs. Revenue+1

  • Incentives like the R&D Tax Credit, or accelerated capital allowances for eligible investments (e.g. energy-efficient equipment), can provide further tax relief, especially for companies engaged in innovation or investment. flowbx.com+2Ireland Accountant+2

  • Grants and supports from local or national enterprise bodies when combined with tax relief help manage early-stage cashflow even before profits materialise. Brand Nova Digital+1

Smart founders treat tax relief as part of a broader financial strategy not a one-off saving.

Common Pitfalls & What Start-Ups Should Watch Out For

Start-Up CT Relief is generous — but it’s not automatic. Many founders lose out because of avoidable mistakes.

  • Failing to record or pay employer’s PRSI correctly. Because relief depends on qualifying PRSI, missing, late or incorrect PRSI payments can disqualify the benefit.

  • Running a non-qualifying trade. Certain trades (land development, previously carried-on trades, service companies under close-company definitions) are excluded. It pays to check if your trade qualifies before relying on the relief. Revenue+1

  • Assuming relief is indefinite. The benefit ends after the five-year relevant period. Business plans should reflect post-relief reality.

  • Ignoring compliance and accounting discipline. To claim relief (and especially to carry unused relief forward), accurate bookkeeping, proper payroll records and timely corporation tax returns are essential.

That’s why many start-ups benefit from professional guidance — and why a partner like Amergin can make a difference.

How Amergin Consulting Can Help You Maximise Start-Up Relief

At Amergin, we specialise in helping Irish SMEs and startups not just survive — but thrive. Here's how we support businesses during their critical early years:

1. Structuring & Incorporation Advice — “Qualifying Trade” Check
Before you launch, we review your proposed trade activities to confirm eligibility for start-up tax relief. If your business falls into excluded categories (e.g. land-development, certain close-company structures), we advise on alternative structures or the implications of going ahead.

2. Payroll & PRSI Setup Aligned with Relief Requirements
We help you set up payroll and PRSI correctly from day one, ensuring employer’s PRSI (or Class S PRSI) is recorded properly. That means you don’t leave tax relief on the table because of technical payroll issues.

3. Cashflow Forecasting & Tax Calendar Planning
We build a 12-month (or multi-year) plan that integrates your tax obligations, expected profits, payroll costs, and investments — so you can see how relief, liabilities and cashflow will align over time. No surprises. No panic. Clear vision.

4. Claim Management & Compliance Monitoring
When it's time to file the CT1 return, we ensure your claim under Section 486C is correct, maximised, and fully documented. We also help you manage carry-forward relief if profits are low in early years.

5. Combine Reliefs Strategically — R&D, ACA, Grants, SURE
Many start-ups qualify for more than one incentive. We evaluate whether your business could benefit from R&D tax credit, capital allowances, grants, or personal-tax schemes like SURE — helping you build a layered approach to savings and growth.

6. Long-Term Planning Beyond Year 5
Because the CT relief ends after five years, we support your transition to standard Corporation Tax, with forecasting, margin analysis and growth planning — so relief is a runway, not a crutch.

With Amergin, start-up tax relief becomes part of a comprehensive financial strategy  not just a nice win, but a foundation for sustainable growth.

What Start-Ups Should Do Right Now

If you are thinking of launching a business, or you have only recently registered a company:

  1. Check whether your business qualifies for Start-Up Relief (Section 486C) confirm incorporation date, trade type, and whether the trade is “qualifying.”

  2. Set up accurate payroll + PRSI from Day One — record employer’s or Class S PRSI properly to qualify for full relief.

  3. Prepare a 5-year business plan with cashflow forecasts & break-even analysis incorporate CT relief, expected profits, growth, investment and tax liabilities.

  4. Consider additional reliefs R&D Tax Credit, capital allowances, SURE, grants especially if you plan to invest or grow aggressively.

  5. Engage expert advice relief depends on correct structure, diligent documentation and timely compliance. Professional support improves your chances of maximising benefits and avoiding pitfalls.

Conclusion: Starting Smart Means Growing Smart

The first years of a start-up are always unpredictable. But in Ireland, the right tax structures and timely compliance can bend that uncertainty in your favour.

The Start-Up Tax Relief scheme offers real, tangible financial breathing space not a handout, but a designed incentive for growth. It rewards entrepreneurs who build properly, hire staff, and commit to a legitimate trade.

But that opportunity is only as valuable as your planning. If you set up payroll clumsily, miss PRSI deadlines, forget to claim the relief, or launch a non-qualifying trade  the benefit disappears.

That’s why many founders partner with professionals. With the right support, you turn the dream of starting a business into a strategy for sustainable growth.

At Amergin, we are ready to help  from structure and incorporation to tax planning, compliance, cashflow forecasting and long-term growth strategy.

Let’s build your business on firm foundations.


About Amergin Consulting Ltd.

Amergin Consulting Ltd. is a Dublin-based chartered accountancy and business advisory firm serving Ireland’s SMEs and growth companies across construction, technology, professional services, and renewable energy.
We specialise in Accounting, Payroll, Taxation, and CFO Services that help businesses build stronger foundations for profit and compliance.

Need help running a year-end tax review or planning your 2026 payroll changes?
Amergin Consulting’s finance and tax team can help you identify deductions, forecast cash flow, and ensure full compliance before the year closes.
Book your 30-minute consultation:  https://calendly.com/amergin-group_free/30min

Disclaimer

This article is for general informational purposes only and does not constitute financial or tax advice. While every effort has been made to ensure accuracy, Budget 2026 legislation may change upon enactment of the Finance Act 2025.
Public should seek professional advice tailored to their specific circumstances before acting on any points discussed.

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