Ireland Halves tax Rate for Tech Firms
October 15, 2015 Taxation in Ireland
DUBLIN – High-tech companies from around the world have been offered a new incentive to do business in Ireland, as the government announced slashed tax rates conducting research in the country.
While detailing the latest budget plan of Ireland on October 14th the national Finance Minister Michael Noonan announced that the government will introduce new tax breaks aimed at attracting more tech companies to the country.
Currently Ireland levies a corporate tax rate of 12.5 percent, however, the Minister announced that this rate would be halved to 6.25 percent for businesses which meet the criteria of the new “knowledge development box” (KBD) system.
In order to enjoy the newly reduced rates, businesses operating from Ireland will need to show that they are innovative businesses with earnings tied to the use and development of patents or copyrighted software which was discovered, researched or developed in Ireland.
Further, businesses applying for the reduced rate will need to show that they also employ high-skilled individuals residing in Ireland.
Ireland’s tax system has been heavily criticized in the EU and abroad for allegedly allowing multination businesses to dodge taxes, but during his announcement the Minister said that “…the KDB adds a further dimension to our ‘best in class’ competitive corporation tax offering, which includes the 12.5pc headline rate; the R&D tax credit; and the intangible asset regime” and that “…fostering innovation in Ireland will be critical to our new economic model.”
Photo By: NeoSpire