Complementing the government’s commitment to supporting and encouraging R&D there is also a favourable intellectual property (IP) taxation regime in place. Combined with our strong legal framework for the development and protection of intellectual property rights this means Ireland is an ideal location for businesses engaged in R&D and IP development.
Finance Act 2009 introduced a tax incentive regime for the acquisition of intangible assets through the provision of capital allowances on capital expenditure incurred by companies on specified assets. Irish resident companies can use the IP regime to achieve a very low effective tax rate on trading income from qualifying IP (patents, brands, software, know-how, etc.) due to the availability of IP allowances (which broadly follow accounting amortisation).
Tax savings may also be obtained by reorganising existing patent structures (due to the removal of patent tax exemption) and reorganising existing licensing arrangements, if appropriate, due to the lack of Irish withholding tax on qualifying licenses for non-Irish patents going forward.
Ireland now has a comprehensive system of IP incentives which are available for:
- Trademarks and brand names
- Scientific research
- Intangible assets
- Patents and registered designs
- Research & Development expenditure
- “Know how”
- Domain names, copyrights, service marks and publishing titles
- Goodwill, to the extent that it directly relates to the assets outlined above
These incentives are supplemented by other features of the tax system such as:
- No capital duty
- No thin-capitalisation rules
- Entry and exit costs minimised and eliminated
- No CFC rules
- Favourable double tax relief
- Favourable stamp duty relief
We assist our clients to maximise returns from the exploitation of IP by:
- Identifying the appropriate IP structure(s) that may be used
- Identifying capital-cost write offs
- Identifying the allowances available for offset against income