Companies welcome new tax write-off measures for trademarks
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Details of intellectual property relief measures outlined in the Finance Bill were broadly welcomed yesterday.
The measures will allow companies to write off the costs of acquiring intellectual property against taxable profits over a 15-year period and amortise these costs in line with Irish accounting treatment.
Intellectual property refers to intangibles which are a result of creativity such as patents, trademarks or copyrights.
The new regime applies to expenditure incurred by a company after May 7 of this year.
"There is the option to claim a minimum of 7pc per annum regardless of accounting treatment," said Joan O'Connor, tax partner at Deloitte.
The moves are designed to benefit both homegrown and multinational firms.
Measures
Ms O'Connor added that measures are attractive in two ways.
"An Irish subsidiary company will secure a cash benefit from the tax relief, while the US parent should secure an accounting book benefit under US GAAP on consolidation of the Irish company's results."
Pat Wall, chair of the American Chamber of Commerce in Ireland, said the news was welcome in a week when US President Barack Obama announced proposals for changes to the US tax regime.
Strong signal
"It sends a strong signal to the multinational community that the Irish Government is determined to maintain Ireland's tax competitiveness," he said. "Many other jurisdictions already allow tax write-off against IP development and acquisition and our competitive armoury has now substantially strengthened."
Ireland's 12.5pc corporation tax rate is one of the lowest in Europe and is less than one-third of that in the US.
But others noted limitations in the move. "The relief is quite limited, however -- for a company, every €100 it spends on intellectual property might only reduce its tax bill by about €1 per year over 15 years," said the Institute of Chartered Accountants in Ireland tax director Brian Keegan.
- Ailish O'Hora
