Ireland’s budget 2016 will be announced tomorrow, 13 October 2015, and it is expected that additional detail on the research and development (R&D) tax incentive known as the “knowledge development box” would be provided in the budget 2016 statement.
The “knowledge development box” is a tax rate for income generated from R&D and intellectual property and is expected to be set in the region of 5% and 6.25%.
The initial announcement of the knowledge development box came after the closure of the “double Irish” tax loophole, and it is anticipated that the knowledge development box would be an attempt to keep Ireland’s tax system as competitive as possible. However, other European countries (including Germany) have warned that these incentives are to be used only as a reward for R&D investment and not as a tax avoidance tool.
Read an October 2015 report prepared by the KPMG member firm in Ireland: Budget 2016: Do you know what the knowledge box is?
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.