Ireland‘s Finance Act 2015 introduced a corporation tax relief: Knowledge Development Box, the first Irish measure of its kind to fully comply with the Organisation for Economic Co-operation and Development (OECD) “modified nexus” approach. The Knowledge Development Box is an Irish counterpart of an otherwise known Patent Box (sometimes referred to as IP Box or Innovation Box) regime which allows the taxation of profits from qualifying patented innovations and copyrighted software at a 50% lower rate – 6.25% instead of 12.5%, to be precise.

The Irish Knowledge Development Box meets the “modified nexus” approach set by the OECD under the Base erosion and profit shifting (BEPS) initiative. Under the nexus approach, the R&D expenditure is used as a proxy for substantial activity and therefore links benefits to the requirement to have undertaken the R&D expenditure incurred to develop the intellectual property.

Irish Royalty Rate Analysis

As a general rule, quality, comparability and contemporaneous data is key for any Patent Box analysis. With regards to this, the RoyaltyRange intellectual property royalty rates database is a trustworthy tool for the Irish royalty rate analysis:

• We focus on recent third-party licence agreements covering European region and worldwide territory;
• Our database contains an extensive range of data on royalties paid for patent and software licensing;
• Our database consists of agreements with disclosed royalty rates in percentages;
• Our data is compliant with the OECD BEPS measures, as well as the upcoming EU Anti Tax Avoidance Package.