If you search for information on starting a business in Ireland, you will still find many guides describing Section 486C as a “3-year start-up relief”. However, for almost every active company eligible to claim today, that framing is outdated.<\/p>\n\n\n\n
Under legislative updates introduced in the Finance Act 2021, the relief period was formally extended from 3 years to 5 years for qualifying trades commenced on or after 1 January 2018. Additionally, Finance Act 2024 rectified one of the most frequently raised concerns about the scheme: owner-managed companies with directors paying Class S PRSI can now utilise those contributions for their relief from 2025 onwards.<\/p>\n\n\n\n
For the full picture of how corporation tax works in Ireland \u2014 rates, deadlines, and other reliefs beyond 486C \u2014 see our complete corporation tax guide for Irish SMEs<\/a>. <\/p>\n\n\n\n Section 486C Start-Up Relief is a tax incentive that reduces or eliminates corporation tax for qualifying new companies during their first five years of active trading.<\/p>\n\n\n\n The relief directly reduces the final corporation tax bill based on the Pay Related Social Insurance (PRSI) paid by the company to the revenue.<\/p>\n\n\n\n Section 486C applies specifically to:<\/strong><\/p>\n\n\n\n What is excluded?<\/strong><\/p>\n\n\n\n Section 486C does not apply to passive income, investment income, foreign dividends, rental income from property, or capital gains on assets held purely for investment purposes.<\/p>\n\n\n\n Section 486C relief lasts for 5 years for any qualifying trade that commenced on or after 1 January 2018.<\/p>\n\n\n\n Understanding why older content still mentions a “3-year relief” comes down to how the legislation evolved:<\/p>\n\n\n\n If your company began trading on or after 1 January 2018, your business falls under the 5-year relief framework<\/strong>.<\/p>\n\n\n\n To qualify for Section 486C relief, an enterprise must be incorporated in Ireland (or an EEA \/ UK state tax resident in Ireland) on or after 14 October 2008 and begin trading within statutory dates.<\/p>\n\n\n\n Revenue enforces clear anti-avoidance rules so that existing businesses cannot simply reconstitute themselves under a new corporate shell to claim the tax exemption.<\/p>\n\n\n\n The maximum relief your company can claim depends on its total corporation tax liability for the accounting period before applying Section 486C.<\/p>\n\n\n\n If your company\u2019s total corporation tax liability across all income sources is \u20ac40,000 or less<\/strong> for a 12-month accounting period, you qualify for full relief. Your corporation tax on qualifying trade profits is reduced to nil<\/strong>, or by the total amount of your qualifying PRSI pool for that period\u2014whichever gives the smaller tax reduction.<\/p>\n\n\n\n If your total annual corporation tax bill falls between \u20ac40,001 and \u20ac60,000<\/strong><\/a>, the relief tapers off on a sliding scale.<\/p>\n\n\n\n The reduction is determined using Revenue’s marginal relief calculation, where the tax reduction is scaled down proportionally as your tax bill approaches \u20ac60,000.<\/p>\n\n\n\n If your business has over \u20ac60,000 in corporation tax on all of its activities for an accounting period, then Section 486C relief for that accounting period will not apply for that year. <\/p>\n\n\n\nWhat Is Section 486C Start-Up Relief?<\/strong><\/h2>\n\n\n\n
\n
How Long Does the Relief Last \u2014 3 Years or 5 Years?<\/strong><\/h2>\n\n\n\n
\n
Who Qualifies \u2014 Eligibility Criteria<\/strong><\/h2>\n\n\n\n
Qualification Criteria<\/strong><\/td> Qualifying Companies & Trades<\/strong><\/td> Excluded Trades & Structures<\/strong><\/td><\/tr> Trading Dates<\/strong><\/td> Trade commenced between 1 January 2009 and 31 December 2026.<\/td> Trades commencing after 31 December 2026 (unless extended by future finance acts).<\/td><\/tr> Trade Authenticity<\/strong><\/td> Completely new commercial trading activity carried on in Ireland.<\/td> Trades previously carried on by a sole trader, partnership, or another company.<\/td><\/tr> Corporate Independence<\/strong><\/td> Standalone commercial operation.<\/td> Activities previously carried on as part of an associated company\u2019s trade or corporate group.<\/td><\/tr> Excluded Sectors<\/strong><\/td> Standard commercial goods, SaaS, manufacturing, tech, retail, and general services.<\/td> Dealing in or developing land or exploration\/extraction of natural resources and minerals.<\/td><\/tr> Professional Services<\/strong><\/td> General commercial and tech-enabled service activities.<\/td> “Service companies” under Section 441 of the TCA 1997 (close companies providing legal, medical, accounting, or professional services).<\/td><\/tr> EU State Aid Limits<\/strong><\/td> Operations compliant with standard EU de minimis state aid rules.<\/td> Primary agricultural production, fishery\/aquaculture sectors, and the coal sector.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n How Much Relief Can You Claim? Full vs Marginal Relief<\/strong><\/h2>\n\n\n\n
Total Corporation Tax Liability<\/strong><\/td> Applicable Relief Category<\/strong><\/td> Relief Mechanism<\/strong><\/td><\/tr> \u20ac40,000 or Less<\/strong><\/td> Full Relief<\/td> Tax reduced to nil, or by the total allowable PRSI pool (whichever is lower).<\/td><\/tr> \u20ac40,001 to \u20ac60,000<\/strong><\/td> Marginal Relief<\/td> Relief tapers down progressively on a sliding scale.<\/td><\/tr> Above \u20ac60,000<\/strong><\/td> No Relief<\/td> No Section 486C relief can be claimed for that accounting period.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n 1. Full Relief (Total CT Liability of \u20ac40,000 or Less)<\/strong><\/h3>\n\n\n\n
2. Marginal Relief (Total CT Liability Between \u20ac40,000 and \u20ac60,000)<\/strong><\/h3>\n\n\n\n
3. No Relief (Total CT Liability Exceeds \u20ac60,000)<\/strong><\/h3>\n\n\n\n
Important Compliance Note: <\/strong>The thresholds of \u20ac40,000 and \u20ac60,000 are not just applicable to the tax liability of your qualifying trade in the accounting period but to the total tax liability of your company for the accounting period, including any tax liability from non-qualifying interest or property income. These thresholds are reduced in proportion if your accounting period is less than 12 months. <\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n The PRSI Link \u2014 Why the 2025 Class S Change Matters<\/strong><\/h2>\n\n\n\n