Michael McGrath (Cork South Central, Fianna Fail)
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10. To ask the Minister for Finance when he expects a knowledge development box to be in place; if he is concerned that delays in its introduction will disadvantage Ireland in seeking mobile investment; and if he will make a statement on the matter. [41753/14]

Michael Noonan (Limerick City, Fine Gael)
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In recognition of the fact 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 intangible assets is key for Ireland's success in attracting foreign direct investment (FDI).  This is why as part of my Budget announcement I made a clear statement of my intention to introduce a competitive income-based regime for intangible assets in Ireland, in what will be known as a "Knowledge Development Box" or "KDB". 

I view this as a positive measure for Ireland and I will ensure the Irish KDB will be among the best in class on offer internationally.  The design of this measure will be along the lines of patent boxes which have existed for many years in countries that compete with us for FDI.

At present, the measures that are in place in our competitor locations are the subject of on-going discussions at the OECD and EU level, as regards to their compatibility with the international rules around fair tax competition.  Until these discussions have been concluded, it is clear that it is not possible to guarantee that any of the measures in our competitor jurisdictions are sustainable and that they won't be changed in the very near future.

In Ireland, we have always been clear on the need for certainty in the Irish corporation tax offering.  For this reason, we will await the outcome of these international discussions before we will legislate for the KDB and therefore make sure that the Irish provisions will be sustainable in the long-term.  The timeline for this process is not set in stone, but I intend to legislate for implementation in Finance Bill 2015.

In the meantime, later this year, I will launch a public consultation on how the Irish KDB should operate.  This will gather views from as broad a spectrum as possible on what this measure should entail, and ensure that the process of introducing and implementing the KDB will be well advanced by the time the international negotiations are concluded.

As a small country with a stable annual Budget and Finance Bill process, Ireland has a strong track record for being a fast-follower and for implementing timely tax legislation once international rules have been agreed.  This will also be the case for the Knowledge Development Box and along with the recent enhancements to Ireland's existing regime for intangible assets, it should give confidence to companies who wish to put their knowledge-based capital in Ireland.