Simon Harris (Wicklow, Fine Gael) | Oireachtas source

On the issue of State aid and the EU, which is an issue previously raised by Deputy Michael McGrath, the KDB complies with the modified nexus standard which was agreed with the OECD as part of the base erosion and profit shifting, BEPS, process. The EU code of conduct has approved and adopted the modified nexus standard. Clearly, the tax sovereignty of a member state is a member state competency within the European Union. As we have adhered to the modified nexus rules and the KDB as a general measure that is available to all Irish corporate taxpayers the KDB does not require any specific approval by the EU, such that approval by the European Commission under State aid rules is not required. However, as I said, the EU code of conduct has approved and adopted the new modified nexus approach, which the OECD base erosion and profit shifting, BEPS, process has also identified.

The point made by Deputy Tóibín in terms of what qualifies and how we can ensure we are getting real value for money is a valid one. The whole idea of the KDB is to encourage R&D in Ireland.

Business processes do not qualify. It would have to qualify to be registered as a patent or for copyright. The business process the Deputy outlined at the start in his useful example would not qualify. It has to be something that is patentable or copyrightable. Therefore, business processes would not qualify.