Reduce the 12.5% rate of tax where possible to 6.25% by making maximum use of the Knowledge Development Box
The Knowledge Development Box (KDB) is a relief that applies to income from qualifying patents, computer programmes and, for smaller companies, certain other certified intellectual property (IP).
If a company qualifies for KDB, it may be entitled to a deduction equal to 50% of its qualifying profits. This means its qualifying profits may be taxed at 6.25%.
To qualify for KDB a company must create a usable qualifying asset from qualifying Research and Development activities from which it earns income.
A qualifying asset is one that is created from R&D activities. Such assets include:
- Computer programs
- An invention protected by a qualifying patent
- IP for small companies which is certified by the Controller of Patents as patentable, but not patented.
To find out more about Knowledge Development Box, please arrange a consultation with one of our advisors.
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