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KDB services
In Tax
The Knowledge Development Box (KDB) is a tax incentive for innovative companies. The KDB regime offers a 6.25% effective tax rate on profits arising from qualifying assets. The main categories of qualifying assets are patents (including patents pending) and copyrighted software.
The KDB follows the OECD’s nexus approach and closely links the benefits of the regime to the proportion of R&D carried on by the company.
Is KDB relevant to you?
Does your company carry out R&D?
- A company that already carries on R&D and would qualify to avail of R&D tax credits may also qualify for the KDB.
Does your company have an invention that is or can be protected by a patent or copyright?
- Small and medium enterprises can access the KDB in respect of certain intellectual property (IP) without the need for the IP to be patented, subject to meeting the relevant criteria and obtaining the appropriate certification.
Does your company earn profit from exploiting this Intellectual Property?
- Profits from the exploitation of qualifying IP may qualify for KDB benefits and avail of an effective tax rate of 6.25% on qualifying IP profits.
When do I make a claim?
A claim is made in a company’s corporation tax return and must be made within 24 months of the end of the relevant accounting period.
The KDB regime was due to expire on 31 December 2020, however, The Finance Bill 2020 amendment extends the operation of the KDB until 1 January 2023 at least. This extension is welcome and should provide greater certainty as to the kind of expected cash flows which may arise for taxpayers claiming the relief.
What EY can do for you
How EY can help
EY Ireland’s team can assist with your KDB claims and includes specialists from across our R&D, International Tax Services and Transfer Pricing practices, to unlock the full value of KDB for your organisation.
- We have expertise in relevant sectors
- We are a multidisciplinary experienced team
- We understand the requirements of tax authorities
- We use tailored methodologies relevant to you/your sector
Knowledge Development Box services
