Minister for Jobs, Enterprise and Innovation Mary Mitchell O’Connor has announced the commencement of an Act for a certification scheme aimed at inventions developed by SMEs. The scheme comes within the Knowledge Development Box initiative announced in the Finance Act, 2015.
Announcing the scheme the Minister said “this is a good day for innovative SMEs involved in research and development that results in valuable Intellectual Property (IP) assets”.
Under the scheme, SMEs can apply to the Controller of Patents, Designs and Trade Marks for a certificate where they believe that their IP generated as a result of R&D is novel, non-obvious and useful. If granted, the certificate will allow the SME to apply the lower rate of corporation tax of 6.25% to profits arising from the intellectual property assets.
Evidence shows that investment in R&D increases economic productivity and fosters competitiveness and that firms with a persistent R&D strategy outperform those with an irregular or no R&D investment program.
Welcoming the scheme the Minister said “R&D can be very expensive and time consuming and not all R&D is successful. SMEs that invest in R&D will now be able to benefit from the lower rate of corporation tax if their IP meets the criteria of being novel, non-obvious and useful. I expect that the extension of the KDB to Irish SMEs will incentivise greater levels of R&D within the indigenous sector and that with greater levels of R&D, increased job creation will follow which is a key priority of mine.”
Welcoming the scheme, the Minister for Employment and Small Business, Mr Pat Breen TD, said “it places SMEs on a par with larger companies by making them for eligible for a lower rate of corporation tax on profits from their IP assets. I welcome this additional support and anticipate that it will encourage our indigenous SMEs to be more creative.
The Minister for Training, Skills and Innovation, John Halligan TD, said “Promoting innovation is a key focus for me in my role as Minister for Innovation and I believe this Act offers SMEs valuable opportunities to invest in greater levels of R&D”.