Are You Eligible?
What Intellectual Property Qualifies for the KDB?
In order to qualify for the regime the first thing that should be considered is whether or not the company has or is capable of creating qualifying assets and in turn exploiting those qualifying assets as part of a profitable trade.
A Qualifying Asset is IP, other than marketing related IP, which is the result of R&D activities. The definition of IP includes computer programs within the meaning of the Copyright and Related Rights Act 2000, inventions protected by qualifying patents, supplementary protection certificates for medicinal or plant protection products and plant breeders’ rights.
With a view to increasing access to the relief for certain SMEs which might otherwise consider patenting to be restrictive, there is an expansion of the definition of IP to include inventions that are certified by the Controller of Patents, Designs and Trademarks as being novel, non-obvious and useful. For KDB purposes an SME is defined as a company with annual income from IP of up to €7.5m, group turnover of up to €50m, less than 250 employees across the group and a group balance sheet of under €43m.
There is also scope to link assets and create a “family of assets” where it can be demonstrated that there is significant commonality of scientific, technological or engineering challenges underlying the associated R&D.
Where a company has qualifying assets for KDB purposes, the qualifying income from those assets will include royalties and licence fees. Also, where the price of a product or service includes an amount which is attributable to a qualifying asset, a portion of the income from those sales can qualify (i.e. embedded IP scenarios).
The assessment tool included above should provide you with a high level indication of:
1. Whether your company might qualify for the KDB regime and
2. How much benefit the company might get from availing of the KDB regime
We would note that this tool is for indicative purposes only and that in advance of any claim being made under the KDB regime a full review of the relevant legislative provisions should be carried out. This tool is a high level calculator and will not result in a figure that is sufficiently accurate to be relied upon or included in any tax return.