Ireland is becoming something of a hot spot for research & innovation and IP related activity. The government is taking note of the benefits for the country and for business and trade, and is offering an array of tax incentives to encourage innovation and IP.
You are likely aware of the 12.5% corporation tax rate and the 25% tax credit for research and development. The Knowledge Development Box adds a new dimension and seeks to incentivise companies to develop Intellectual Property (IP) from R&D undertaken in Ireland by halving the standard corporate tax rate on qualifying income to 6.25%.
What is the Knowledge Development Box?
The KDB encourages the development and commercial exploitation of patents and copyrighted software from R&D that is undertaken in Ireland. If offers an effective tax rate of 6.25% on qualifying profits of a specified trade and applies to accounting periods commencing on or after January 1st 2016. It is the first OECD and EU compliant Knowledge Box, implementing a ‘modified nexus’ approach.
Who will benefit?
All companies, Irish and foreign-owned, small and large, can avail of this incentive. The lower tax rate will apply to current or future income deriving from qualifying IP. The IP itself must have been generated from qualifying R&D undertaken in Ireland.
Is the KDB compatible with the R&D tax credit and the IP tax amortization (Intangible Assets)?
The good news is that, yes, the KDB compliments these initiatives. There are some things you should know about how to maximise the benefits of KDB in line with either the R&D tax credit or IP tax amortisation. We will be covering this, and more, in our Knowledge Development Box event.
The event will take place April 21st in Cork and will guide you through everything you need to know about the Knowledge Development Box. Aine Hollingsworth and her colleagues from Revenue will give a detailed presentation on the Guidance Notes that they have been developing for the KDB. Other expert speakers will include Mike Sheehan and Brian Cronin from Deloitte, Eoghan Hanrahan from Enterprise Ireland, Christine Kelly from IDA, Gerard Barrett from the Patent Office and Diarmuid Gavin of Ronan Daly Jermyn.
Learn more and register here: http://www.irdg.ie/knowledge-development-box-cork-21st-april/