I propose to take Questions Nos. 187 and 188 together.
IDA Ireland is authorised by my Department to provide a range of measures and financial supports to companies, including those involved in the commercialisation of intellectual property. These supports include employment, capital, research and development, environmental and training grants. These grants remain an important means of encouraging firms to invest in Ireland, particularly in regional locations.
I can assure the Deputy that there is no uncertainty regarding the treatment of intellectual property assets in the tax system. Irish tax law provides for a scheme of relief in the form of capital allowances available to companies that incur capital expenditure on intangible assets for the purposes of a trade. The scheme applies to intangible assets which are recognised as such under generally accepted accounting practice and which are listed as a “specified intangible asset” in section 291A of the Taxes Consolidation Act 1997. An important feature of the relief is that the allowances may only be offset against trading income generated from the intangible assets and, for capital expenditure incurred on or after 11 October 2017, only against up to 80% of that income.
In addition to this, the Government introduced The Knowledge Development Box (KDB) in 2015. The KDB provides for relief from tax on the profits earned from the exploitation of patents, copyrighted software and intellectual property for small companies, provided that the intellectual property was developed through research and development (R&D) carried out by companies resident in Ireland. The IDA continue to promote the KDB to new and existing clients.
More broadly, IDA Ireland’s record results for 2018 underline how strongly Ireland continues to perform when it comes to attracting foreign direct investment (FDI) of all types. FDI continues to drive the economy with strong employment growth in this sector at 7%, compared to the national average of 3% in 2018. FDI Exports experienced growth of 10% and an increase of 8% in the amount spent in the Irish economy on payroll, materials and services – which now stands at over €19.2bn. Ireland’s investment and value proposition continues to resonate with companies across the globe as investors search for stability and certainty.