Róisín Shortall (Dublin North West, Social Democrats)
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130. To ask the Minister for Finance further to Parliamentary Question Nos 126 and 127 of 14 November 2017, his views on the reason for the uptake of the knowledge development box; his plans to review the functioning of this scheme in view of same; and if he will make a statement on the matter. [50654/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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I am advised by Revenue that the Knowledge Development Box (the “KDB”) only applies for accounting periods commencing on or after 1 January 2016. The claimant company has a period of up to 24 months to make a claim for relief under the KDB. Taking an accounting period which commenced on 1 January 2016 and ended on 31 December 2016, the tax return was due for filing on 23 September 2017. 

A small number of companies whose accounting periods ended on 31 December 2016 have submitted claims for their 2016 tax returns, which were filed by 23 September 2017. Due to taxpayer confidentiality, Revenue cannot comment on the size or nature of the claimant companies to date.

Given the large amount of documentation that is necessary, and given that an election into the KDB is irrevocable, it is anticipated that more companies will make use of the 24 month time frame available. As such, more claims in respect of the year ended 31 December 2016 are expected to be made by 23 September 2018.

Furthermore, the KDB can only be claimed by companies who are already carrying out qualifying R&D which has led to the creation of qualifying IP (being a patent, copyrighted software, patentable but not patented IP for small companies). It is expected that companies, in the medium and longer term, will restructure their functions in order to locate more of their R&D activities in Ireland to avail of the KDB. 

At this stage, for the reasons stated above, it is too early to review the functioning of the scheme. The scheme will be reviewed in accordance with the Department of Finance Tax Expenditure Guidelines

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