Ireland’s Budget for 2016 was presented by the country’s minister for finance, Michael Noonan, on 13 October 2015. Aside from the confirmation that country by country reporting would be introduced in line with the OECD’s BEPS project, one of the more notable developments was the announcement of a ‘knowledge development box’ (KDB), seen by some as a competitor to the UK’s patent box. The KDB will apply a corporation tax rate of 6.25% on profits arising from research and development projects relating to certain patents and copyrighted software carried out by an Irish company; this is half of the country’s main rate, and less than the 10% of the UK’s patent box rate. Noonan confirmed that the KDF will be in compliance with the OECD ‘modified nexus’ model; however, some have warned that the new KDB could still face EU scrutiny.
Ireland’s Budget for 2016 was presented by the country’s minister for finance, Michael Noonan, on 13 October 2015. Aside from the confirmation that country by country reporting would be introduced in line with the OECD’s BEPS project, one of the more notable developments was the announcement of a ‘knowledge development box’ (KDB), seen by some as a competitor to the UK’s patent box. The KDB will apply a corporation tax rate of 6.25% on profits arising from research and development projects relating to certain patents and copyrighted software carried out by an Irish company; this is half of the country’s main rate, and less than the 10% of the UK’s patent box rate. Noonan confirmed that the KDF will be in compliance with the OECD ‘modified nexus’ model; however, some have warned that the new KDB could still face EU scrutiny.
