Knowledge Development Box Explained – Ireland

The Knowledge Development Box (KDB) is a government incentive that enables companies to obtain corporation tax relief on income from qualifying assets. A company qualifying for KDB may be entitled to a deduction equal to 50% of its qualifying profits, meaning that the qualifying profits may be taxed at an effective rate of 6.25%.

To qualify for this generous incentive, the company must earn income from the qualifying asset, which it must have created from qualifying Research and Development (R&D) activities. Examples of qualifying assets include:

  • A computer programme
  • An invention protected by a qualifying patent
  • Intellectual Property (IP) for small companies that is certified by the Controller of Patents as patentable, but which has not been patented.

The legislation is relatively new (it was introduced in 2015) and is very complex so advanced planning is essential to achieve the maximum benefit available.

We can advise you on this.

  • Providing advice to companies on how to meet the qualifying conditions and maximise the benefits
  • Preparing calculations to establish the relevant profits arising from qualifying assets for the purpose of filing the companies’ tax returns.

Want to know more?

Please get in touch to arrange a no-obligation discussion.