SMEs to Avail of Knowledge Development Box
25th October 2016
Minister for Jobs, Enterprise & Innovation, Mary Mitchell O’Connor, is set to enable Irish SMEs involved in research and development activities, avail of the Knowledge Development Box taxation scheme.
The scheme, which sees profits from Irish inventions resulting from R&D activities in Ireland taxed at 6.25%, is to be made available to SMEs through a certification process overseen by the Patents Office.
Minister Mitchell O’Connor was given Cabinet approval for the publication of a Bill entitled Knowledge Development Box (Certification of Inventions) Bill 2016 to allow small and medium sized companies to avail of the Knowledge Development Box. Under the new scheme, the Patents Office will be the body certifying applications for inventions under the new certification scheme to check that they meet the criteria of being novel, useful and non-obvious.
The Bill, which is hoped, will be passed before the end of the year, will open up the opportunity for companies across a broad spectrum to pay lower taxes on profits from Irish-based research and development activities. This includes companies in incubation units right through to high-potential start-ups in all industry sectors once they are generating income resulting from research and development activities.
The Minister for Jobs, Enterprise and Innovation Minister, Mary Mitchell O’Connor, says the scheme should serve to significantly boost Irish innovation and investment in research and development. “The aim of this is to boost and encourage Irish-based innovation. Developing new innovative products is high risk and can often take time to develop. This scheme will allow a company or a start-up re-invest in their business as they will be able to retain a greater proportion of their earnings. This is something that can specifically drive innovation in the Irish SME sector”.
“Furthermore, I see this scheme as assisting those companies that wish to scale-up. We have many terrific companies developing innovative products but are sometimes bought out before they develop their full potential. This scheme will assist companies achieve scale. Innovation is at the heart of our economic recovery and growth and when this legislation is enacted we will have in place a Knowledge Development Box to suit the needs of all enterprises, large and small,” said Minister Mitchell O’Connor.