When Minister Donohoe unveiled Budget 2026, the headline was clear: Ireland wants to back investment, jobs and competitiveness.

Companies working in creative technology, content production or research-driven innovation will benefit from some of the announcements. The R&D tax credit is getting a boost, the Digital Games Tax Credit has been extended and enhanced, and a new top-up relief for visual effects work in film has been introduced.

For small businesses and early-stage innovators, the changes could make a real difference to how affordable it is to experiment, build and scale. But as with any tax measure, the devil is in the detail, and there are important caveats to understand.

Why These Sectors Matter

Creative and technology sectors create high-value jobs, attract international investment and generate spillover effects across the economy. A games studio in Dublin might work with freelance artists in Cork, a sound designer in Galway and a marketing agency in Limerick. A film production brings not just cast and crew, but spending in hotels, transport, catering and equipment hire. R&D, meanwhile, is the engine room of long-term competitiveness, driving everything from software innovation to advanced manufacturing.

The question is whether Budget 2026's measures will genuinely help small firms in these areas, or whether the benefits will mainly flow to those already operating at scale.

What's Changed

The R&D tax credit rate is rising from 30% to 35%, which means companies can claim back more of what they spend on qualifying research and development.

The first-year payment threshold has also been raised to €87,500, making it easier for smaller projects to access meaningful support early on. For a micro business or startup trying something new, that reduction in upfront cost can be the difference between proceeding and putting an idea on hold.

A smaller administrative adjustment was announced for companies with heavy R&D teams. The new rule allows for 100% of an R&D employee’s emoluments to qualify if at least 95% of their time is spent on qualifying R&D activities. This benefits companies that employ people entirely to work on R&D who previously needed to apportion their costs (to account for the small amount of admin, HR and other non-R&D activities they complete in a year).

The Digital Games Tax Credit, which was due to sunset at the end of 2025, has been extended to the end of 2031. More significantly, it now covers post-release content, provided the original game claimed the credit. This is a big deal for studios that rely on downloadable content, updates and expansions to sustain their games after launch. The three-year window for post-release claims gives developers breathing room to invest in keeping their titles alive and relevant.

On the film side, the existing Section 481 relief remains at 32% on qualifying expenditure. The new element is a 40% rate for productions with at least €1 million in eligible visual effects spending, capped at €10 million per production. This is aimed at attracting high-end, VFX-heavy projects and strengthening Ireland's position in the global production market. For indigenous studios specialising in animation, compositing or CGI, it could mean more opportunities to compete for ambitious work.

There are also broader changes that support the ecosystem. The lifetime limit for Entrepreneur Relief on capital gains tax has jumped from €1 million to €5 million for disposals from 2026 onwards. Programmes like KEEP, SARP and the Foreign Earnings Deduction have been extended, helping to attract and retain talent.

The Upsides for Small Firms

For small businesses, the R&D credit increase is straightforward: it lowers the effective cost of experimenting. If you're a software company testing a new algorithm, or a hardware startup prototyping a device, a 35% credit makes that work more affordable. The higher first-year threshold also improves cashflow, which is often the binding constraint for early-stage ventures.

The games credit extension matters because it provides certainty. Studios can now plan multi-year projects and post-launch roadmaps without worrying that the incentive will disappear halfway through. The inclusion of post-release content is particularly valuable in an industry where games are increasingly treated as live services rather than one-off products. A small studio that ships a game in 2027 can now plan DLC or seasonal content with the knowledge that those investments will also qualify for relief.

The VFX enhancement, while aimed at larger productions, could still benefit smaller players indirectly. If more high-budget projects come to Ireland, there will be demand for local subcontractors, freelancers and specialist services. A small animation studio might land work on a blockbuster that wouldn't have shot here otherwise.

There's also a signalling effect. When government commits to extending and enhancing these programmes, it reduces policy risk. Investors and international partners pay attention to that kind of stability.

The Challenges and Caveats

Not everything is straightforward. Some of the new measures, particularly the VFX top-up, are conditional on EU State aid approval and commencement orders. Until those come through, there's uncertainty about timing and exact terms. Small firms planning around these incentives need to stay alert to when the rules actually take effect.

The €1 million threshold for the VFX relief is also a barrier for many small productions. If you're making a low-budget feature or a short-form series, you're unlikely to hit that level of eligible spend, so the 40% rate won't apply. The enhancement is clearly designed for larger, international projects, not modest domestic ones.

Administrative complexity is another concern. Enhanced rules, especially around post-release content for games, will require careful accounting and documentation. Small firms without in-house tax expertise may struggle to navigate the requirements or may face higher compliance costs. There's a risk that some eligible businesses simply won't claim because the process feels too daunting.

Luckily, we’re here to clear things up. At Myriad, we make it our business to keep on top of the admin, so you can focus on your business. Our goal is to make your claim quick and hassle-free, so you have the strongest claim without all the leg work.

What Happens Next

The real test for Budget 2026’s success will be implementation. Key details are still to come, including precise definitions of eligible expenditure, accounting rules and administrative processes. What exactly counts as relevant visual effects work? How will post-release content be ring-fenced and documented? When will the Finance Bill clarify these points, and when will the measures formally commence?

There's also the question of take-up. Will small firms actually use these incentives, or will they remain the preserve of larger, more sophisticated businesses? Monitoring how the reliefs perform in practice, and whether they're genuinely accessible to the businesses they're meant to help, will be important.

Final Thoughts

Budget 2026's enhancements to R&D, digital games and film tax reliefs represent a meaningful push toward supporting innovation in creative and technology sectors. For small businesses, the changes could lower barriers, improve cashflow and provide the confidence to take on ambitious projects. But the benefits won't flow automatically. They depend on timely implementation, clear guidance and genuine accessibility for firms that don't have dedicated tax advisors on speed dial.

If you're a small innovator in one of these sectors, it’s always helpful to chat with the experts. At Myriad, we want to make sure that making your claim is easy and that you’re not at risk of pushback from Revenue. Get in touch with our experts for a free consultation on your projects and see how Budget 2026 could boost your business.