Kieran O'Donnell (Fine Gael) | Oireachtas source

I welcome the Minister to the House and I commend this Bill. I have a few questions for the Minister. We continually talk about multinationals coming to Ireland, how there should be a large element of research and development, how we should promote that and how we have historically done so in terms of ensuring that they maintain a presence here. We must give the same advantage to SMEs. Contrary to belief, they provide the bulk of the jobs in the Irish economy. Multinationals provide a huge amount of jobs but when it goes down the basics, the SME sector is enormous. I would have worked with it for many years as a self-employed chartered accountant. I know what is involved and about its investment in research and development.

When will section 1 of the Bill come into effect? The Minister referred to the fact that she will be bringing forward technical amendments on Committee Stage to reflect the fact that she does not expect the Bill to be enacted by year end, which means that Part 6 cannot come into operation on 1 January. When does she expect it to come into operation? Could she give an overview as to why it is being deferred beyond that date? As she probably appreciates, year end for most SMEs is 31 December. They work on a calendar year basis and it therefore make sense for this aspect to commence on 1 January.

The Bill stipulates that the inventions must be novel, non-obvious and useful. When they are being assessed by the Controller of Patents, Designs and Trade Marks, does the controller look at the commercial and employment elements because they are extremely important? What we really want to know is whether this particular measure will lead to the creation of sustainable jobs. Could the Minister give us an overview of this?

The Bill stipulates that someone applies to the Controller of Patents, Designs and Trade Marks for the knowledge development box but it would then be up to a review by the Revenue Commissioners as to whether they qualify for the 6.25% rate. In the past, the one thing someone who was investing heavily in research and development needed was certainty. It is important that if people are applying for the knowledge development box, there is a link-up with Revenue at that stage. If I had a client in that situation, I would get them to apply for the knowledge development box but I would also look for a ruling from Revenue at the time as a matter of course. Someone might invest strongly, in many cases using money they had to borrow. I would like to know whether they were able to borrow and invest. The risks are enormous. The one thing to ensure is that this will qualify for the 6.25% rate.

I have seen how this has operated in the past. Before the 12.5% rate came in, there was a 10% rate for manufacturing. Many companies would have effectively deemed themselves to be manufacturing companies. At some stage, Revenue would visit them and, in some cases, the company did not qualify. I would always have made it a rule that if a company was a borderline case it always sought a ruling from Revenue.

It is hugely important that we encourage companies to invest in research and development. The multinationals come in here and provide jobs. This knowledge development box within the SME sector should be a major catalyst to create our own multinational sector out of SMEs. We are doing it already. Many of our companies, such as the large co-operatives, already operate across the world. I do not wish to name companies but we have many.

The Minister might clarify whether there is a limit on the number of staff. If a person is operating on their own or with one or two employees, will they qualify? We must provide a system and avenue for people to invest in research and development, which the Minister has done and which I very much welcome, but the key thing we need is certainty around the measure. Could the Minister address that?