Dáil Éireann Debate, Wednesday - 15 June 2016
81. Deputy Bernard J. Durkan asked the Minister for Finance if Irish interests in the manufacturing and services sectors are adequately safeguarded through the mechanism of the Irish knowledge development box; and if he will make a statement on the matter. [16318/16]
View answerThe purpose of the Knowledge Development Box is to encourage companies to develop intellectual property and thereby engage in substantive R&D operations that have a positive impact on the Irish economy.
It is recognised internationally that investment and growth in OECD economies is increasingly driven by knowledge-based investment, which is related to research and development and intellectual property. Putting in place an attractive tax offering for developing and commercially exploiting intellectual property is therefore important to encourage companies to develop their knowledge-based capital in Ireland, and for our continued success in attracting foreign direct investment into Ireland.
The Knowledge Development Box is the first incentive of its kind in the world to meet the OECD's 'modified nexus' standard. These rules were agreed as part of the BEPS (or Base Erosion and Profit Shifting) Project and were subsequently approved by the EU. They seek to align taxing rights with the location of substantive operations which is consistent with the overall approach to corporation tax in Ireland, as we seek to attract both foreign direct investment, and also support indigenous Irish companies.
I am confident that the Knowledge Development Box legislation strikes the appropriate balance between ensuring Ireland's corporation tax policy remains competitive while complying with accepted international principles, and that this puts Ireland in a unique position to offer long-term certainty to innovative industries who are planning their research and development investments.
I therefore view the Knowledge Development Box as a potentially positive measure for all sectors in Ireland.
