Knowledge Development Box (Certification of Inventions) Bill 2016: Committee Stage (Resumed)

SECTION 18

I welcome the Minister. We are resuming consideration of the Bill on amendment No. 6 to section 18. The amendment has already been discussed as part of a group with amendment No. 5. The debate cannot be reopened on that group of amendments. However, I understand the Minister would like to signal very briefly her intentions on Report Stage. I will use my discretion and allow her to speak briefly.

On Committee Stage on 14 December I thanked Senators for their amendments which, for the reasons I gave at the time, I did not accept. As indicated, I am prepared on Report Stage to revert to section 18 with an amendment which accommodates the concerns of Senators about the section and the publication of the controller’s annual report on the KDB certification scheme. The amendment will provide that the controller’s annual report on the scheme will be laid before the Houses of the Oireachtas and thus be in the public domain.

On amendment No. 7, tabled by Senator Pádraig Mac Lochlainn, the controller is an independent office holder who acts under the superintendence and direction of the Minister. The provision in section 18(2) is a necessary safeguard that allows the controller to undertake his statutory functions without undue and inappropriate interference by any Minister. Senator Pádraig Mac Lochlainn's amendment would undermine the independence of the controller in carrying out his statutory functions under the Bill. This is also a feature of the legislation governing the Office of the Director of Corporate Enforcement which is another independent office under my Department. The controller must be able to undertake this function without fear of interference. For that reason, I am not accepting amendment No. 7.

Amendment No. 8, also in the name of Senator Pádraig Mac Lochlainn, seeks the inclusion of the names of applicants under the KDB certification scheme in the report to the Minister. The names of applicants are not included in the controller’s annual reports on his activities covering patents, trademarks and designs. Section 18 follows that practice. Moreover, as Senators will be aware, the Revenue Commissioners do not disclose the identities of taxpayers, while the Taxes Consolidation Act 1997 prevents Revenue from releasing information on taxpayers. For that reason, I will not accept amendment No. 8.

On amendment No. 9, in the names of Senators Alice-Mary Higgins and Lynn Ruane, it is the case that applications before the office will be examined individually on the basis of novelty, usefulness and non-obviousness. In the case of refusals, the office will follow exactly the same process as it does now in the case of refusals of patents, trademarks and designs. The reasons for refusal are case specific and not made publicly available. That is also the intention in the Bill. For these reasons, I will not accept amendment No. 9.

Amendment No. 6 not moved.

I move amendment No. 7:

In page 14, lines 24 to 27, to delete all words from and including ", but” in line 24 down to and including "Act" in line 27.

Amendment put:
The Committee divided: Tá, 8; Níl, 24.

  • Bacik, Ivana.
  • Devine, Máire.
  • Humphreys, Kevin.
  • Landy, Denis.
  • Mac Lochlainn, Pádraig.
  • Nash, Gerald.
  • Ó Donnghaile, Niall.
  • Warfield, Fintan.

Níl

  • Boyhan, Victor.
  • Burke, Colm.
  • Burke, Paddy.
  • Butler, Ray.
  • Buttimer, Jerry.
  • Byrne, Maria.
  • Coghlan, Paul.
  • Conway, Martin.
  • Daly, Mark.
  • Feighan, Frank.
  • Gallagher, Robbie.
  • Leyden, Terry.
  • Lombard, Tim.
  • McFadden, Gabrielle.
  • Mulherin, Michelle.
  • Ó Domhnaill, Brian.
  • O'Donnell, Kieran.
  • O'Donnell, Marie-Louise.
  • O'Mahony, John.
  • O'Sullivan, Ned.
  • Reilly, James.
  • Richmond, Neale.
  • Swanick, Keith.
  • Wilson, Diarmuid.
Tellers: Tá, Senators Pádraig Mac Lochlainn and Fintan Warfield; Níl, Senators Gabrielle McFadden and John O'Mahony.
Amendment declared lost.

I move amendment No. 8:

In page 14, line 36, after "applications" to insert "and name of applicants".

Amendment put:
The Committee divided: Tá, 11; Níl, 27.

  • Black, Frances.
  • Devine, Máire.
  • Gavan, Paul.
  • Humphreys, Kevin.
  • Landy, Denis.
  • Mac Lochlainn, Pádraig.
  • Nash, Gerald.
  • Ó Donnghaile, Niall.
  • O'Sullivan, Grace.
  • Ruane, Lynn.
  • Warfield, Fintan.

Níl

  • Burke, Colm.
  • Burke, Paddy.
  • Butler, Ray.
  • Buttimer, Jerry.
  • Byrne, Maria.
  • Clifford-Lee, Lorraine.
  • Coffey, Paudie.
  • Coghlan, Paul.
  • Conway, Martin.
  • Daly, Mark.
  • Feighan, Frank.
  • Gallagher, Robbie.
  • Horkan, Gerry.
  • Leyden, Terry.
  • Lombard, Tim.
  • McFadden, Gabrielle.
  • Mulherin, Michelle.
  • Noone, Catherine.
  • Ó Domhnaill, Brian.
  • O'Donnell, Kieran.
  • O'Donnell, Marie-Louise.
  • O'Mahony, John.
  • O'Sullivan, Ned.
  • Reilly, James.
  • Richmond, Neale.
  • Swanick, Keith.
  • Wilson, Diarmuid.
Tellers: Tá, Senators Paul Gavan and Pádraig Mac Lochlainn; Níl, Senators Gabrielle McFadden and John O'Mahony.
Amendment declared lost.
Amendments Nos. 9 and 10 not moved.
Section 18 agreed to.
Sections 19 to 24, inclusive, agreed to.
SECTION 25
Amendment Nos. 10a and 10b not moved.
Question proposed: "That section 25 stand part of the Bill."

I welcome the Minister and thank her for bringing the Bill through the House. It proposes to expand access to the preferential tax rate for income generated on intellectual property and patents with the intention of nurturing innovation and encouraging companies to locate high value jobs in Ireland. I recognise that the Minister and the Department have been engaging with us on this area and we are happy to work with her and any other Member of the House on the Bill between now and Report Stage.

My colleague, Senator Alice-Mary Higgins, has already debated a number of aspects of the Bill on Second and Committee Stages. I remind the House that during these contributions she indicated her wish to withdraw her amendments and reserve the right to reintroduce them or variants of them on Report Stage.

On amendments Nos. 10, 10a and 10b, the Bill, as drafted, does not require companies applying for the knowledge development box certificate to indicate whether they already benefit from other grants, subsidies, tax incentives or other enterprise and/or research and development supports from a public or semi-State body. There needs to be a clear understanding of how the knowledge box certificate fits in with other grants, tax incentives or State supports the company receives or has received in the past in order that a big picture can be formed of Ireland's enterprise and innovation strategy. As Senator Alice-Mary Higgins has stated previously, we would like to see a cost-benefit analysis of the knowledge box proposal and there to be an annual exchange of information between the Department and Revenue in order that a cost-benefit analysis of the knowledge development box can be conducted annually. The measure will have a cost in terms of tax revenue forgone. We need to have a clear picture of the annual cost to the Exchequer of the measure and be in a position to monitor and assess the costs and benefits of it in the coming years. We must be confident the knowledge development box operates in the way it was intended and does not lead to a disproportionate erosion of the tax base. I withdraw the amendments co-signed with Senator Alice-Mary Higgins and reserve the right to reintroduce them on Report Stage.

The Senator's position is noted.

Question put and agreed to.
SECTION 26
Government amendment No. 11:
In page 17, lines 10 and 11, to delete "1 January 2017 but is not determined before that date, that Act, as in force immediately before that date" and substitute the following:
"the commencement of this Part but is not determined before that commencement, that Act, as in force immediately before that commencement ".
Amendment agreed to.
Section 26, as amended, agreed to.
Sections 27 to 30, inclusive, agreed to.
TITLE
Government amendment No. 12:
In page 5, line 12, to delete "1 January 2017" and substitute "the commencement of Part 6 of this Act".
Amendment agreed to.
Government amendment No. 13:
In page 5, lines 14 and 15, to delete "given that only Irish patents granted prior to that date can fall within paragraph (b) of that definition".
Amendment agreed to.
Title, as amended, agreed to.
Bill reported with amendments.

When is it proposed to take Report Stage?

Is that agreed? Agreed.

Report Stage ordered for Tuesday, 31 January 2017.
Sitting suspended at 3.40 p.m. and resumed at 4.30 p.m.