Knowledge Development Box: Revenue Guidance Notes

Knowledge Development Box Update

How will the Knowledge Development Box work in practice?

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KPMG in Ireland

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Knowledge Development Box: Revenue Guidance Notes

The guidance notes set out Revenue' view on how the KDB will work in practice and include useful practical examples. KPMG worked closely with Revenue in drafting these examples based on our first-hand experience of how companies operate and innovate.

 

What is the KDB?

In summary, the KDB, introduced by Finance Bill 2015, is aimed at incentivising companies to undertake innovative activities in Ireland by providing an effective 6.25% corporate tax rate for profits generated from the sale or exploitation of certain intellectual property (“IP”). The KDB applies to accounting periods commencing on or after 1 January 2016.

Relief under the KDB is linked to the proportion of qualifying R&D expenditure being incurred by the Irish company on the development of a qualifying IP asset as a percentage of overall group expenditure on the same IP asset.

 

Does the KDB apply to my company?

KDB relief may be available to a company where all of the following conditions are satisfied:

  1. The company undertakes R&D activity in Ireland;
  2. The R&D results in the development, creation or improvement of a patent, copyrighted software, or IP equivalent to a patentable invention;
  3. The company generates income from the exploitation of the IP.

 

What to do next?

If you believe your company may qualify for the KDB please do not hesitate to
contact us and we can discuss this with you.

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