Tax breaks introduced for small firms investing in research

Ireland’s version of a Knowledge Development Box, which promises to lower corporate tax rates for financial returns arising from research, has been enacted into law.

The original idea was proposed in the Finance Act 2015 as a tax incentive to encourage large companies, particularly multinationals to pursue more research in Ireland. The revised Knowledge Development Box (Certification of Inventions) Act 2017, which now comes into force, encourages small and medium-sized businesses to pursue research and lower their tax burden.

The Act allows three categories of intellectual property to qualify for the programme; patents, copyrighted software and inventions that are novel, non-obvious and useful.