Michael McGrath

Finance minister Michael McGrath has signed a commencement order for the relevant provision of the Finance Act 2022, which forms part of Ireland’s implementation of an OECD agreement on taxation.

The KDB is an OECD-compliant intellectual property (IP) regime, which provides relief from corporation tax on income arising from qualifying assets such as computer programs, inventions protected by a qualifying patent, or certified inventions for SMEs.

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. To qualify for the KDB, the qualifying assets must result from qualifying R&D activities carried out by the company in Ireland.

Mr McGrath said: “This is an important step in the implementation of the OECD Two Pillar agreement. Ireland is fully committed to agreed international reforms.

“Work is continuing to transpose the EU Minimum Tax Directive in Ireland in the Finance Bill this autumn, to provide for the 15 per cent minimum effective corporation tax rate element of Pillar Two.”