SMEs can now access KDB tax relief without filing a patent

Irish SMEs can now apply for Knowledge Development Box (KDB) tax relief without owning a patent if their invention is certified by the Patents Office to be novel, non-obvious and useful.  This is known under the KDB scheme as ‘intellectual property for small companies’.

All that is required is an application to the Patents Office for a KDB Certificate – which must include an opinion from a Patent Agent attesting that the invention is novel, non-obvious and useful. However, this is a new departure for Irish Patent Agents and it remains to be seen how this will work in practice.

Applying to accounting periods commencing on or after 1 January 2016, the KDB relief provides for a 6.25% corporation tax rate on profits arising from certain (1) patents, (2) copyrighted software, and (3) ‘intellectual property for small companies’ resulting from qualifying R&D activity carried out in Ireland. For more information see the Revenue website.