IDA Ireland has welcomed the budget announcement that Ireland will have the world’s first OECD-compliant Knowledge Development Box (KDB).
This new enhancement to Ireland’s tax offering will encourage innovation and research into Ireland.
Martin Shanahan, CEO at IDA Ireland said: “A strong vibrant enterprise sector, including a large foreign direct investment segment, is vital to our continued economic well-being.
This KDB will see a lower tax rate applied to profits from intellectual property that is generated as a result of research and development undertaken in Ireland.
This is the first Knowledge or Patent Box in the world that is compliant with the detail of the OECD Base Erosion, Profit Shifting (BEPS) initiative. This allows companies to make long-term plans for their activities in Ireland.
The rate of 6.25% that was announced is competitive – I believe it will help in attracting new R&D to Ireland.
In addition to IDA Ireland’s direct R&D support, the KDB adds a further dimension to our best in class corporation tax offering, which includes the 12.5% headline rate, the R&D tax credit and the intangible asset regime.
As we speak, large companies are making plans for where they will locate key parts of their business in a “post-BEPS” world – it is vital that we keep Ireland at the front of their mind.
As a country, we need to ensure our continued competitiveness across all factors that impact on investment and not take that flow of investment for granted.
Investors continue to choose Ireland – and the IDA’s pipeline remains strong.”