Public Consultation on the Research & Development Tax Credit and the Knowledge Development Box - April 2022

The Department of Finance invites submissions from the public in relation to the following Corporation Tax measures:

• The Research and Development tax credit, and
• The Knowledge Development Box.

The Research and Development (R&D) tax credit was introduced in Finance Act 2004. The central purpose of the R&D tax credit is to encourage companies to undertake high-value-added R&D activity in Ireland, thereby supporting jobs and investment here. It supports companies in investing their own resources in R&D activities, thereby stimulating more activity than government resources could support through direct expenditure measures alone.

The Knowledge Development Box (KDB) is an OECD-compliant intellectual property (IP) regime, which provides for relief from Corporation Tax on income arising from qualifying assets such as computer programs and inventions protected by a qualifying patent. The objective of the KDB is to encourage companies to develop IP in Ireland and thereby engage in substantive operations that have a high ‘value-add’ for the Irish economy, both in the FDI and indigenous sectors.

The purpose of this public consultation is to consider the current challenges facing firms who are active in the R&D and IP space, as well as the implications of recent domestic and international tax reforms for these two reliefs. All input will be considered in the context of this year’s Budget and Finance Bill.

In responding to this consultation you are invited to:

• Give your views on the specific questions set out below. You do not have to answer every question – you can choose to answer any or all of the questions.
• Provide details of any alternative approaches or options you feel might be beneficial in dealing with the issues being addressed.
• Provide details of relevant issues not covered in this paper.
• Where appropriate, provide some analysis of the Exchequer cost/yield of your preferred option.
• Comment generally on the direction you would like to see tax policy in this area develop.

Your views are important as they may help to influence future policy development in these areas.

The consultation period will run from Thursday 14 April to Monday 30 May 2022. Any submissions received after this date may not be considered.

How to Respond

The preferred means of response is by email to: ctreview@finance.gov.ie

E-mail submissions will receive an acknowledgement of receipt within 3 working days.

Alternatively, you may respond by post to:

R&D Tax Credit and KDB – Public Consultation

Tax Division,

Department of Finance,

Government Buildings,

Upper Merrion Street,

Dublin 2

D02 R583

Please include contact details if you are responding by post. When responding, please indicate whether you are contributing to the consultation process as a professional adviser, representative body, business representative, member of the public, or in any other capacity.

Freedom of Information

Responses to this consultation are subject to the provisions of the Freedom of Information Acts. Parties should also note that responses to the consultation may be published on this website (www.gov.ie).

Submissions on the Research & Development Tax Credit and the Knowledge Development Box