{"id":11084,"date":"2022-04-18T20:24:40","date_gmt":"2022-04-18T20:24:40","guid":{"rendered":"http:\/\/legalblog.ie\/?p=11084"},"modified":"2024-04-06T18:09:55","modified_gmt":"2024-04-06T18:09:55","slug":"rd-incentives","status":"publish","type":"post","link":"https:\/\/legalblog.ie\/rd-incentives\/","title":{"rendered":"Patents+R&#038;D"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_63 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/legalblog.ie\/rd-incentives\/#The_Knowledge_Box_Regime\" title=\"The Knowledge Box Regime\">The Knowledge Box Regime<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/legalblog.ie\/rd-incentives\/#Qualifying_Assets\" title=\"Qualifying Assets\">Qualifying Assets<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/legalblog.ie\/rd-incentives\/#Profits\" title=\"Profits\">Profits<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/legalblog.ie\/rd-incentives\/#Qualifying_Expenditure\" title=\"Qualifying Expenditure\">Qualifying Expenditure<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/legalblog.ie\/rd-incentives\/#Claim\" title=\"Claim\">Claim<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/legalblog.ie\/rd-incentives\/#Linked_Assets\" title=\"Linked Assets\">Linked Assets<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/legalblog.ie\/rd-incentives\/#Anti-Avoidance_Transfer_Pricing\" title=\"Anti-Avoidance \/ Transfer Pricing\">Anti-Avoidance \/ Transfer Pricing<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/legalblog.ie\/rd-incentives\/#Timing\" title=\"Timing\">Timing<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/legalblog.ie\/rd-incentives\/#2019_Act_SMEs\" title=\"2019 Act SMEs\">2019 Act SMEs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/legalblog.ie\/rd-incentives\/#2019_Act_General_Changes\" title=\"2019 Act General Changes\">2019 Act General Changes<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/legalblog.ie\/rd-incentives\/#2020_Extension\" title=\"2020 Extension\">2020 Extension<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/legalblog.ie\/rd-incentives\/#2022_Act_Changes_I\" title=\"2022 Act Changes I\">2022 Act Changes I<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/legalblog.ie\/rd-incentives\/#2022_Act_Changes_II\" title=\"2022 Act Changes II\">2022 Act Changes II<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/legalblog.ie\/rd-incentives\/#2022_Act_Repeals\" title=\"2022 Act Repeals\">2022 Act Repeals<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/legalblog.ie\/rd-incentives\/2\/#Patents_Scientific_and_Certain_Other_Research_Know-How_and_Certain_Training_ss_754-769R\" title=\"Patents, Scientific and Certain Other Research, Know-How and Certain Training (ss. 754-769R)\">Patents, Scientific and Certain Other Research, Know-How and Certain Training (ss. 754-769R)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/legalblog.ie\/rd-incentives\/2\/#Patents_ss_754-762\" title=\"Patents (ss. 754-762)\">Patents (ss. 754-762)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/legalblog.ie\/rd-incentives\/2\/#Interpretation_Chapter_1\" title=\"Interpretation (Chapter 1).\">Interpretation (Chapter 1).<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/legalblog.ie\/rd-incentives\/2\/#Annual_allowances_for_capital_expenditure_on_purchase_of_patent_rights\" title=\"Annual allowances for capital expenditure on purchase of patent rights.\">Annual allowances for capital expenditure on purchase of patent rights.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/legalblog.ie\/rd-incentives\/2\/#Effect_of_lapse_of_patent_rights\" title=\"Effect of lapse of patent rights.\">Effect of lapse of patent rights.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/legalblog.ie\/rd-incentives\/2\/#Charges_on_capital_sums_received_for_sale_of_patent_rights\" title=\"Charges on capital sums received for sale of patent rights.\">Charges on capital sums received for sale of patent rights.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/legalblog.ie\/rd-incentives\/2\/#Relief_for_expenses\" title=\"Relief for expenses.\">Relief for expenses.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/legalblog.ie\/rd-incentives\/2\/#Spreading_of_revenue_payments_over_several_years\" title=\"Spreading of revenue payments over several years.\">Spreading of revenue payments over several years.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"https:\/\/legalblog.ie\/rd-incentives\/2\/#Capital_sums_effect_of_death_winding_up_and_partnership_changes\" title=\"Capital sums: effect of death, winding up and partnership changes.\">Capital sums: effect of death, winding up and partnership changes.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-24\" href=\"https:\/\/legalblog.ie\/rd-incentives\/2\/#Manner_of_making_allowances_and_charges\" title=\"Manner of making allowances and charges.\">Manner of making allowances and charges.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-25\" href=\"https:\/\/legalblog.ie\/rd-incentives\/2\/#Application_of_Chapter_4_of_Part_9\" title=\"Application of Chapter 4 of Part 9.\">Application of Chapter 4 of Part 9.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-26\" href=\"https:\/\/legalblog.ie\/rd-incentives\/2\/#Scientific_and_certain_other_research_ss_763-767\" title=\"Scientific and certain other research (ss. 763-767)\">Scientific and certain other research (ss. 763-767)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-27\" href=\"https:\/\/legalblog.ie\/rd-incentives\/2\/#Interpretation_sections_764_and_765\" title=\"Interpretation (sections 764 and 765).\">Interpretation (sections 764 and 765).<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-28\" href=\"https:\/\/legalblog.ie\/rd-incentives\/2\/#Deduction_for_revenue_expenditure_on_scientific_research\" title=\"Deduction for revenue expenditure on scientific research.\">Deduction for revenue expenditure on scientific research.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-29\" href=\"https:\/\/legalblog.ie\/rd-incentives\/2\/#Allowances_for_capital_expenditure_on_scientific_research\" title=\"Allowances for capital expenditure on scientific research.\">Allowances for capital expenditure on scientific research.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-30\" href=\"https:\/\/legalblog.ie\/rd-incentives\/2\/#Tax_credit_for_research_and_development_expenditure\" title=\"Tax credit for research and development expenditure.\">Tax credit for research and development expenditure.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-31\" href=\"https:\/\/legalblog.ie\/rd-incentives\/2\/#Tax_credit_on_expenditure_on_buildings_or_structures_used_for_research_and_development\" title=\"Tax credit on expenditure on buildings or structures used for research and development.\">Tax credit on expenditure on buildings or structures used for research and development.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-32\" href=\"https:\/\/legalblog.ie\/rd-incentives\/2\/#Limitation_of_tax_credits_to_be_paid_under_section_766_or_766A\" title=\"Limitation of tax credits to be paid under section 766 or 766A.\">Limitation of tax credits to be paid under section 766 or 766A.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-33\" href=\"https:\/\/legalblog.ie\/rd-incentives\/2\/#Research_and_development_corporation_tax_credit\" title=\"Research and development corporation tax credit.\">Research and development corporation tax credit.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-34\" href=\"https:\/\/legalblog.ie\/rd-incentives\/2\/#Research_and_development_corporation_tax_credit_expenditure_on_buildings_or_structures\" title=\"Research and development corporation tax credit: expenditure on buildings or structures.\">Research and development corporation tax credit: expenditure on buildings or structures.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-35\" href=\"https:\/\/legalblog.ie\/rd-incentives\/2\/#Know-how_and_certain_training_ss_768-769\" title=\"Know-how and certain training (ss. 768-769)\">Know-how and certain training (ss. 768-769)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-36\" href=\"https:\/\/legalblog.ie\/rd-incentives\/2\/#Allowance_for_know-how\" title=\"Allowance for know-how.\">Allowance for know-how.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-37\" href=\"https:\/\/legalblog.ie\/rd-incentives\/2\/#Relief_for_training_of_local_staff_before_commencement_of_trading\" title=\"Relief for training of local staff before commencement of trading.\">Relief for training of local staff before commencement of trading.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-38\" href=\"https:\/\/legalblog.ie\/rd-incentives\/2\/#Transmission_Capacity_Rights_ss_769A-769F\" title=\"Transmission Capacity Rights (ss. 769A-769F)\">Transmission Capacity Rights (ss. 769A-769F)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-39\" href=\"https:\/\/legalblog.ie\/rd-incentives\/2\/#Interpretation_Chapter_4\" title=\"Interpretation (Chapter 4).\">Interpretation (Chapter 4).<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-40\" href=\"https:\/\/legalblog.ie\/rd-incentives\/2\/#Annual_allowances_for_capital_expenditure_on_purchase_of_capacity_rights\" title=\"Annual allowances for capital expenditure on purchase of capacity rights.\">Annual allowances for capital expenditure on purchase of capacity rights.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-41\" href=\"https:\/\/legalblog.ie\/rd-incentives\/2\/#Effect_of_lapse_of_capacity_rights\" title=\"Effect of lapse of capacity rights.\">Effect of lapse of capacity rights.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-42\" href=\"https:\/\/legalblog.ie\/rd-incentives\/2\/#Manner_of_making_allowances_and_charges-2\" title=\"Manner of making allowances and charges.\">Manner of making allowances and charges.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-43\" href=\"https:\/\/legalblog.ie\/rd-incentives\/2\/#Application_of_Chapter_4_of_Part_9-2\" title=\"Application of Chapter 4 of Part 9.\">Application of Chapter 4 of Part 9.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-44\" href=\"https:\/\/legalblog.ie\/rd-incentives\/2\/#Taxation_of_companies_engaged_in_knowledge_development_ss_769G-769R\" title=\"Taxation of companies engaged in knowledge development (ss. 769G-769R)\">Taxation of companies engaged in knowledge development (ss. 769G-769R)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-45\" href=\"https:\/\/legalblog.ie\/rd-incentives\/2\/#Interpretation_and_general\" title=\"Interpretation and general.\">Interpretation and general.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-46\" href=\"https:\/\/legalblog.ie\/rd-incentives\/2\/#Families_of_products_and_assets\" title=\"Families of products and assets.\">Families of products and assets.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-47\" href=\"https:\/\/legalblog.ie\/rd-incentives\/2\/#Corporation_tax_referable_to_a_specified_trade\" title=\"Corporation tax referable to a specified trade.\">Corporation tax referable to a specified trade.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-48\" href=\"https:\/\/legalblog.ie\/rd-incentives\/2\/#Interaction_with_sections_766_766A_and_766B\" title=\"Interaction with sections 766, 766A and 766B.\">Interaction with sections 766, 766A and 766B.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-49\" href=\"https:\/\/legalblog.ie\/rd-incentives\/2\/#Adaptation_of_provisions_relating_to_relief_for_relevant_trading_losses_and_relevant_charges_on_income\" title=\"Adaptation of provisions relating to relief for relevant trading losses and relevant charges on income.\">Adaptation of provisions relating to relief for relevant trading losses and relevant charges on income.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-50\" href=\"https:\/\/legalblog.ie\/rd-incentives\/2\/#Documentation\" title=\"Documentation.\">Documentation.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-51\" href=\"https:\/\/legalblog.ie\/rd-incentives\/2\/#Anti-avoidance\" title=\"Anti-avoidance.\">Anti-avoidance.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-52\" href=\"https:\/\/legalblog.ie\/rd-incentives\/2\/#Application_of_Part_35A\" title=\"Application of Part 35A.\">Application of Part 35A.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-53\" href=\"https:\/\/legalblog.ie\/rd-incentives\/2\/#Transitional_measures\" title=\"Transitional measures.\">Transitional measures.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-54\" href=\"https:\/\/legalblog.ie\/rd-incentives\/2\/#Time_limits\" title=\"Time limits.\">Time limits.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-55\" href=\"https:\/\/legalblog.ie\/rd-incentives\/2\/#Application\" title=\"Application.\">Application.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-56\" href=\"https:\/\/legalblog.ie\/rd-incentives\/2\/#Companies_with_income_arising_from_intellectual_property_of_less_than_E7500000\" title=\"Companies with income arising from intellectual property of less than \u20ac7,500,000.\">Companies with income arising from intellectual property of less than \u20ac7,500,000.<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h3><span class=\"ez-toc-section\" id=\"The_Knowledge_Box_Regime\"><\/span>The Knowledge Box Regime<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The Finance Act 2015 introduced a knowledge development box regime. A 6.25% tax rate applies to profits from qualifying assets earned by an Irish company carrying on a specified trade.<\/p>\n<p>The profits available are the proportion of the profits of the specified trade that the expenditure on qualifying assets bears to total costs incurred to develop the qualifying assets. It is the proportion that the Irish company\u2019s expenditure on the assets bears to the total cost of developing the qualifying assets.<\/p>\n<p>The specified trades under the legislation are \u00a0any one or more of the following:<\/p>\n<ul>\n<li>managing, developing, maintaining, protecting, enhancing or exploiting of intellectual property; researching, planning, processing, experimenting, testing, devising, developing or other similar activity leading to an invention or creation of intellectual property; or<\/li>\n<li>the sale of goods or the supply of services that derive part of their value from activities described above, where the above forms part of a trade.<\/li>\n<\/ul>\n<p>The specified trade is deemed to be a separate trade and the provisions apply to the specified trade, isolated from the other trades of the company.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Qualifying_Assets\"><\/span>Qualifying Assets<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Qualifying asset is an intellectual property, other than marketing-related intellectual property, the result of research and development activities. It includes computer programs, inventions protected by patents, supplementary protection certificates for medicinal and plant or plant protection products and plant breeders\u2019 rights.<\/p>\n<p>Only patents which have undergone a substantive examination will qualify. Patent legislation is to be amended so that Irish patents include a substantive examination for novelty and inventive steps. Unexamined patents certified prior to 1 January 2017 may qualify. In the case of patent granted prior to 2016, the certification requirements do not apply.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Profits\"><\/span>Profits<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The profits of the specified trade are the total income from the qualifying asset comprising royalty income and licence fee income, from the use of or the exploitation of the qualifying asset.<\/p>\n<p>It also includes parts of the sale price, calculated on a just and reasonable basis attributable to the qualifying asset. Expenditure in earning the income is to be approportioned and distributed to this specified trade on a just and reasonable basis.<\/p>\n<p>Qualifying profits in relation to qualifying assets are the profits of the specified trade as defined above in the proportion of the qualifying expenditure incurred on the qualifying asset to the overall expenditure.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Qualifying_Expenditure\"><\/span>Qualifying Expenditure<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Qualifying expenditure on a qualifying asset is expenditure wholly and exclusively incurred by the company in carrying on research and development activities in an EU State, where the activities lead to the development, improvement or creation of a qualifying asset. This is equivalent to the definition of research and development activities for the purpose of the research and development tax credit.<\/p>\n<p>Qualifying expenditure excludes costs incurred to related parties. It excludes acquisition costs and group outsourcing costs.<\/p>\n<p>Uplift expenditure may take account of this excluded expenditure. It is the lower of 30% of qualifying expenditure or the aggregate of amounts paid to group companies and acquisition costs.<\/p>\n<p>Qualifying profits of the specified trade calculated under formula determine the amount of profits qualifying for the knowledge development box relief. The relief gives the company an allowance of 50% of such qualifying profits to be treated as a trading expense. This allowance halves the rate of tax on qualifying profits to 6.25%.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Claim\"><\/span>Claim<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The claim must be made within 24 months of year end. Revenue may take expert advice to determine any aspect of the claim.\u00a0The knowledge development box relief is ignored for the purpose of the research and development tax credit, which is refundable. It cannot be taken into account in order to increase the cash refund.<\/p>\n<p>Where a claim is made for relief on a qualifying asset, the company must continue to claim the relief for periods until the qualifying asset is disposed of or ceases to be used. The qualifying profit is calculated by the sum of the qualifying expenditure and uplift expenditure divided by overall expenditure, multiplied by the qualifying profits. The qualifying profits are effectively taxed at half rate.<\/p>\n<p>Reliefs available under the knowledge development box do not increase the refundable research and development tax credits.\u00a0The amount of unused research and development tax credit arising from the knowledge development box relief is not available for the R&amp;D tax credit refund. It is ring-fenced and must be carried forward.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Linked_Assets\"><\/span>Linked Assets<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Where a company has a number of qualifying assets that are linked, family of assets for this purpose is the smallest grouping of assets for which income and expenditure can be reasonably identified. The knowledge development box is applicable to this family of assets as a single qualifying asset.<\/p>\n<p>Separate documentation is required in respect of each family of assets. The records must support the claim of scientific technologies and engineering challenges underlying the activity, which produce the qualifying asset. There must be a link between the expenditures and the family of assets. Detailed records are required of income and expenditure on the qualifying assets. They must be documented<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Anti-Avoidance_Transfer_Pricing\"><\/span>Anti-Avoidance \/ Transfer Pricing<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Anti-avoidance provisions seek to ensure that qualifying expenditure on a qualifying asset and income from a qualifying asset include only amounts incurred or received for bona fide commercial purposes that are not part of scheme of arrangement, the main purpose of which is tax avoidance.<\/p>\n<p>Large companies must use the transfer pricing rules to determine market value in intellectual property, apportionment of income in relation to the overall income from the qualifying asset, apportionment of R&amp;D activities for the purpose of qualifying expenditure and the qualifying asset apportionments relating to corporation tax referable to be specified trade and transitional measures respectively.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Timing\"><\/span>Timing<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Transitional rules may apply until 2020. Acquisition cost and group outsourcing costs incurred prior to commencement of the legislation on 1 January 2016 may limit the relief as they are not part of qualifying expenditure.<\/p>\n<p>Qualifying expenditure and qualifying assets is determined with reference to the expenditure on all qualifying assets in the two year period ending on the last day of the accounting period. Accordingly pre-2016 expenditure may be incurred in the case of group outsourcing costs; a just and reasonable allocation must be made, where appropriate.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"2019_Act_SMEs\"><\/span>2019 Act SMEs<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Finance Act 2019 includes additional supports for micro and small companies who undertake Research and Development (R&amp;D) activities. These measures, are subject to a commencement order by the Minister for Finance pending State aid approval from the European Commission, include:<\/p>\n<ul>\n<li>An increase in the R&amp;D tax credit rate from 25% to 30%.<\/li>\n<li>The addition of an enhanced method to calculate the payable element of the R&amp;D tax credit, based on twice the current year payroll liabilities.<\/li>\n<li>The introduction of a new provision to allow pre-trading R&amp;D expenditure to qualify for an R&amp;D tax credit, which is limited to offsets or repayments calculated by reference to payroll tax (PAYE and USC) and VAT liabilities for the same period.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"2019_Act_General_Changes\"><\/span>2019 Act General Changes<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The section also makes several changes to the operation of the credit more generally, including:<\/p>\n<ul>\n<li>Increasing, from 5% to 15%, the allowable limit on R&amp;D expenditure outsourced to universities or institutes of higher education.<\/li>\n<li>It provides that grants funded by any State and\/or the European Union must be deducted from qualifying R&amp;D expenditure.<\/li>\n<li>A company which outsources to third parties must now notify in advance of, or on the day of, payment, if that company intends to make a claim for the R&amp;D tax credit.<\/li>\n<li>It aligns the penalty application in respect of an R&amp;D tax credit over claim to the penalty procedures for other credit over claims.<\/li>\n<li>It clarifies that where a payable amount or amount surrendered to a key employee is later withdrawn, then it is not permissible to use any offset of losses or credits to shelter the clawback of such an amount.<\/li>\n<\/ul>\n<p>Finance Act 2019 allows capital expenditure on buildings or structures, which are scientific research, qualify for an allowance and where a company may qualify for a scientific capital allowance and the R&amp;D tax credit, then both reliefs cannot be claimed in respect of the same expenditure.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"2020_Extension\"><\/span>2020 Extension<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Finance Act 2020 provides for the extension of the Knowledge Development Box relief for a further two years until 1 January 2023. The Knowledge Development Box provides for a deduction equal to 50% of the profits from patented inventions and copyrighted software (qualifying assets) earned by a company to the extent it relates to Research and Development (R&amp;D) undertaken by the company.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"2022_Act_Changes_I\"><\/span>2022 Act Changes I<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Finance Act 2022 amended\u00a0 the Research and Development (R&amp;D) tax credit regime. The changes were made to reflect international tax changes. They are timing changes and did not affect the quantum of credit that a company is entitled to claim.<\/p>\n<p>The caps which were imposed on the amount of the payable R&amp;D tax credit no longer apply for accounting periods beginning on or after 1 January 2022.<\/p>\n<p>Finance Act 2022 introduced, provisions relating to R&amp;D expenditure other than on a building or structure and relating to qualifying R&amp;D expenditure on a building or structure, to apply for accounting periods beginning on or after 1 January 2022. It introduced the new system for payment or offset of the R&amp;D corporation tax credit. A company has \u00a0the option to specify whether the R&amp;D corporation tax credit is to be offset against the company\u2019s tax liabilities or is to be paid to the company.<\/p>\n<p>Finance Act 2022 provides that the R&amp;D corporation tax credit in respect of qualifying expenditure (other than expenditure on buildings or structures) is payable over up to three years, as follows:<\/p>\n<ul>\n<li>The first payable instalment in year one, shall equal the greater of:\n<ul>\n<li>\u20ac25,000, or if lower, the amount of the R&amp;D corporation tax credit, or<\/li>\n<li>50 percent of the amount of the R&amp;D corporation tax<\/li>\n<\/ul>\n<\/li>\n<li>The second payable instalment in year two, shall be three-fifths of the remaining balance of the R&amp;D corporation tax credit.<\/li>\n<li>The last payment in year three shall be the remaining balance of the R&amp;D corporation tax credit in respect of the accounting period, less the sum of the first and second instalment amounts.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"2022_Act_Changes_II\"><\/span>2022 Act Changes II<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Payment of the R&amp;D credit is over a three- year period in respect of expenditure on buildings or structures used for qualifying R&amp;D activities, as set out below:<\/p>\n<p>The first payable instalment in year one is 50% of the R&amp;D corporation tax credit. The second payable instalment in year two, is three-fifths of the remaining balance of the R&amp;D corporation tax credit.<\/p>\n<p>The last payment in year three is the remaining balance of the R&amp;D corporation tax credit in respect of the accounting period, less the sum of the first and second instalment amounts.<\/p>\n<p>Payment of the R&amp;D corporation tax credit applies in full is within 48 months from when a valid claim is made and where all conditions to qualify for the R&amp;D corporation tax credit are met, which includes satisfying Revenue Commissioners in respect of the company\u2019s entitlement to the R&amp;D corporation tax credit claim by furnishing any information which may reasonably be required.<\/p>\n<p>There are \u00a0interest and penalty provisions and other administrative matters.<\/p>\n<p>Finance Act 2022 \u00a0\u00a0amends the key employee relief provisions for the R&amp;D tax credit. It includes references to the new\u00a0 provision\u00a0 which \u00a0contain the new payment mechanisms for the R&amp;D tax credit.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"2022_Act_Repeals\"><\/span>2022 Act Repeals<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Finance Act 2022 repealed the non-commenced provisions relating to micro and small sized companies, which were\u00a0 \u00a0not possible to commence for State aid reasons. It amended as follows:<\/p>\n<ul>\n<li>The pre-existing system, which offsets the R&amp;D tax credit against corporation tax liabilities followed by three payable instalments, was changed to a new three-year fixed payment schedule.<\/li>\n<li>A company has the option to call for payment of their eligible R&amp;D tax credit or to request for it to be offset against other tax liabilities.<\/li>\n<li>Pre-existing caps on the payable element of the credit were<\/li>\n<li>The first \u20ac25,000 of a claim on R&amp;D expenditure is payable in full, to provide a cash-flow benefit for smaller R&amp;D projects and encourage more companies to engage with the regime.<\/li>\n<li>Pre-trading expenditure incurred on qualifying R&amp;D activities can be claimed as a payable R&amp;D credit over a three-year period from the year that the company commences to trade.<\/li>\n<li>Finance Act 2022 put transitional measures in place for one year, to smooth the transition to the new payment system for companies already engaged in research &amp; development activities.<\/li>\n<\/ul>\n<p><!--nextpage--><\/p>\n<p>Part 29<\/p>\n<h4>Patents, Scientific and Certain Other Research, Know-How and Certain Training (ss. 754-769R)<\/h4>\n<p>Chapter 1<\/p>\n<h4>Patents (ss. 754-762)<\/h4>\n<p>754.<\/p>\n<h4>Interpretation (Chapter 1).<\/h4>\n<p>(1)In this Chapter &#8211;<\/p>\n<p>&#8220;the commencement of the patent&#8221;, in relation to a patent, means the date from which the patent rights become effective;<\/p>\n<p>&#8220;income from patents&#8221; means &#8211;<br \/>\n(a)any royalty or other sum paid in respect of the user of a patent, and<br \/>\n(b)any amount on which tax is payable for any chargeable period by virtue of this Chapter;<\/p>\n<p>&#8220;Irish patent&#8221; means a patent granted under the laws of the State;<\/p>\n<p>&#8220;patent rights&#8221; means the right to do or to authorise the doing of anything which but for that right would be an infringement of a patent;<\/p>\n<p>&#8220;the writing-down period&#8221; has the meaning assigned to it by section 755(2).<\/p>\n<p>(2)In this Chapter, any reference to the sale of part of patent rights includes a reference to the grant of a licence in respect of the patent in question, and any reference to the purchase of patent rights includes a reference to the acquisition of a licence in respect of a patent; but, if a licence granted by a person entitled to any patent rights is a licence to exercise those rights to the exclusion of the grantor and all other persons for the whole of the remainder of the term for which the rights subsist, the grantor shall be treated for the purposes of this Chapter as thereby selling the whole of the rights.<\/p>\n<p>(3)Where, under section 77 of the Patents Act, 1992, or any corresponding provisions of the law of any country outside the State, an invention which is the subject of a patent is made, used, exercised or vended by or for the service of the State or the government of the country concerned, this Chapter shall apply as if the making, user, exercise or vending of the invention had taken place in pursuance of a licence, and any sums paid in respect thereof shall be treated accordingly.<\/p>\n<p>755.<\/p>\n<h4>Annual allowances for capital expenditure on purchase of patent rights.<\/h4>\n<p>(1)Where a person incurs capital expenditure on the purchase of patent rights, there shall, subject to and in accordance with this Chapter, be made to that person writing-down allowances in respect of that expenditure during the writing-down period; but no writing-down allowance shall be made to a person in respect of any expenditure unless &#8211;<\/p>\n<p>(a)the allowance is to be made to the person in taxing the person&#8217;s trade, or<\/p>\n<p>(b)any income receivable by the person in respect of the rights would be liable to tax.<\/p>\n<p>(2)<\/p>\n<p>(a)Subject to paragraphs (b) to (d), the writing-down period shall be the 17 years beginning with the chargeable period related to the expenditure.<\/p>\n<p>(b)Where the patent rights are purchased for a specified period, paragraph (a) shall apply with the substitution for the reference to 17 years of a reference to 17 years or the number of years comprised within that period, whichever is the less.<\/p>\n<p>(c)Where the patent rights purchased begin one complete year or more after the commencement of the patent and paragraph (b) does not apply, paragraph (a) shall apply with the substitution for the reference to 17 years of a reference to 17 years less the number of complete years which, when the rights begin, have elapsed since the commencement of the patent or, if 17 complete years have so elapsed, of a reference to one year.<\/p>\n<p>(d)For the purposes of this subsection, any expenditure incurred for the purposes of a trade by a person about to carry on the trade shall be treated as if that expenditure had been incurred by that person on the first day on which that person carries on the trade unless before that first day that person has sold all the patent rights on the purchase of which the expenditure was incurred.<\/p>\n<p>(3)Subject to subsection (4), this section shall not apply to a company within the charge to corporation tax.<\/p>\n<p>(4)<\/p>\n<p>(a)Subject to paragraph (b), where a company elects in writing, this section shall apply to capital expenditure, specified in the election, incurred by it on the purchase of patent rights after 7 May 2009 and before 7 May 2011.<\/p>\n<p>(b)An election under paragraph (a) shall be made in the return required to be made under section 951 for the accounting period of the company in which the expenditure is incurred and shall not be made later than 12 months from the end of the accounting period in which the capital expenditure, giving rise to the claim, is incurred.<\/p>\n<p>756.<\/p>\n<h4>Effect of lapse of patent rights.<\/h4>\n<p>(1)Where a person incurs capital expenditure on the purchase of patent rights and, before the end of the writing-down period, any of the following events occurs &#8211;<\/p>\n<p>(a)the rights come to an end without being subsequently revived;<\/p>\n<p>(b)the person sells all those rights or so much of those rights as the person still owns;<\/p>\n<p>(c)the person sells part of those rights and the net proceeds of the sale (in so far as they consist of capital sums) are not less than the amount of the capital expenditure remaining unallowed;<\/p>\n<p>no writing-down allowance shall be made to that person for the chargeable period related to the event or for any subsequent chargeable period.<\/p>\n<p>(2)Where a person incurs capital expenditure on the purchase of patent rights and, before the end of the writing-down period, either of the following events occurs &#8211;<\/p>\n<p>(a)the rights come to an end without being subsequently revived;<\/p>\n<p>(b)the person sells all those rights or so much of those rights as the person still owns, and the net proceeds of the sale (in so far as they consist of capital sums) are less than the amount of the capital expenditure remaining unallowed;<\/p>\n<p>there shall, subject to and in accordance with this Chapter, be made to that person for the chargeable period related to the event an allowance (in this Chapter referred to as a &#8220;balancing allowance&#8221;) equal to &#8211;<\/p>\n<p>(i)if the event is the rights coming to an end, the amount of the capital expenditure remaining unallowed, and<\/p>\n<p>(ii)if the event is a sale, the amount of the capital expenditure remaining unallowed less the net proceeds of the sale.<\/p>\n<p>(3)Where a person who has incurred capital expenditure on the purchase of patent rights sells all or any part of those rights and the net proceeds of the sale (in so far as they consist of capital sums) exceed the amount of the capital expenditure remaining unallowed, if any, there shall, subject to and in accordance with this Chapter, be made on that person for the chargeable period related to the sale a charge (in this Chapter referred to as a &#8220;balancing charge&#8221;) on an amount equal to &#8211;<\/p>\n<p>(a)the excess, or<\/p>\n<p>(b)where the amount of the capital expenditure remaining unallowed is nil, the net proceeds of the sale.<\/p>\n<p>(4)Where a person who has incurred capital expenditure on the purchase of patent rights sells a part of those rights and subsection (3) does not apply, the amount of any writing-down allowance made in respect of that expenditure for the chargeable period related to the sale or any subsequent chargeable period shall be the amount determined by &#8211;<\/p>\n<p>(a)subtracting the net proceeds of the sale (in so far as they consist of capital sums) from the amount of the expenditure remaining unallowed at the time of the sale, and<\/p>\n<p>(b)dividing the result by the number of complete years of the writing-down period which remained at the beginning of the chargeable period related to the sale,<\/p>\n<p>and so on for any subsequent sales.<\/p>\n<p>(5)References in this section to the amount of any capital expenditure remaining unallowed shall in relation to any event be construed as references to the amount of that expenditure less any writing-down allowances made in respect of that expenditure for chargeable periods before the chargeable period related to that event, and less also the net proceeds of any previous sale by the person who incurred the expenditure of any part of the rights acquired by the expenditure, in so far as those proceeds consist of capital sums.<\/p>\n<p>(6)Notwithstanding subsections (1) to (5) &#8211;<\/p>\n<p>(a)no balancing allowance shall be made in respect of any expenditure unless a writing-down allowance has been, or, but for the happening of the event giving rise to the balancing allowance, could have been, made in respect of that expenditure, and<\/p>\n<p>(b)the total amount on which a balancing charge is made in respect of any expenditure shall not exceed the total writing-down allowances actually made in respect of that expenditure less, if a balancing charge has previously been made in respect of that expenditure, the amount on which that charge was made.<\/p>\n<p>(7)This section shall not apply to patent rights in respect of which an allowance has been made to a company under section 284 as applied by section 291A.<\/p>\n<p>757.<\/p>\n<h4>Charges on capital sums received for sale of patent rights.<\/h4>\n<p>(1)<\/p>\n<p>(a)Subject to paragraphs (b) and (c), where a person resident in the State sells any patent rights and the net proceeds of the sale consist wholly or partly of a capital sum, that person shall, subject to this Chapter, be charged to tax under Case IV of Schedule D for the chargeable period in which the sum is received by that person and for successive chargeable periods, being charged in each period on the same fraction of the sum as the period is of 6 years (or such less fraction as has not already been charged).<\/p>\n<p>(b)Where the person by notice in writing served on the inspector not later than 12 months after the end of the chargeable period in which the capital sum was received elects that the whole of that sum shall be charged to tax for the chargeable period in which the sum is received, it shall be charged to tax accordingly.<\/p>\n<p>(c)Where the person by notice in writing served on the inspector not later than 12 months after the end of the chargeable period in which the capital sum was received applies to have the fraction referred to in paragraph (a) determined as being other than the same fraction as the chargeable period is of 6 years, then, if it appears to the Revenue Commissioners that hardship is likely to arise having regard to all the circumstances of the case unless a direction is given under this paragraph, they may direct that the fraction shall be the same fraction of the sum as the chargeable period is of a number of years other than 6 years, and that the charge shall be spread accordingly.<\/p>\n<p>(2)<\/p>\n<p>(a)Where a person not resident in the State sells any patent rights and the net proceeds of the sale consist wholly or partly of a capital sum, and the patent is an Irish patent, then, subject to this Chapter &#8211;<\/p>\n<p>(i)the person shall be chargeable to tax in respect of that sum under Case IV of Schedule D, and<\/p>\n<p>(ii)section 238 shall apply to that sum as if it were an annual payment payable otherwise than out of profits or gains brought into charge to tax.<\/p>\n<p>(b)Where, not later than 12 months after the end of the year of assessment in which the sum referred to in paragraph (a) is paid, the person to whom it is paid, by notice in writing to the Revenue Commissioners, elects that the sum shall be treated for the purpose of income tax for that year and for each of the 5 succeeding years as if one-sixth of that sum were included in that person&#8217;s income chargeable to tax for all those years respectively, it shall be so treated, and all such repayments and assessments of tax for each of those years shall be made as are necessary to give effect to the election; but &#8211;<\/p>\n<p>(i)the election shall not affect the amount of tax to be deducted and accounted for under section 238,<\/p>\n<p>(ii)where any sum is deducted under section 238, any adjustments necessary to give effect to the election shall be made by means of repayment of tax, and<\/p>\n<p>(iii)those adjustments shall be made year by year and as if one-sixth of the sum deducted had been deducted in respect of tax for each year, and no repayment of or of any part of that portion of the tax deducted which is to be treated as deducted in respect of tax for any year shall be made unless and until it is ascertained that the tax ultimately to be paid for that year is less than the amount of tax paid for that year.<\/p>\n<p>(3)<\/p>\n<p>(a)In subsection (2), &#8220;tax&#8221; shall mean income tax, unless the seller of the patent rights, being a company, would be within the charge to corporation tax in respect of any proceeds of the sale not consisting of a capital sum.<\/p>\n<p>(b)Where paragraph (a) of subsection (2) applies to charge a company to corporation tax in respect of a sum paid to it, paragraph (b) of that subsection shall not apply; but &#8211;<\/p>\n<p>(i)the company may, by notice in writing given to the Revenue Commissioners not later than 12 months after the end of the accounting period in which the sum is paid, elect that the sum shall be treated as arising rateably in the accounting periods ending not later than 6 years from the beginning of the accounting period in which the sum is paid (being accounting periods during which the company remains within the charge to corporation tax by virtue of subsection (2)(a)), and<\/p>\n<p>(ii)there shall be made all such repayments of tax and assessments to tax as are necessary to give effect to any such election.<\/p>\n<p>(4)Where the patent rights sold by a person, or the rights out of which the patent rights sold by a person were granted, were acquired by the person by purchase and the price paid consisted wholly or partly of a capital sum, subsections (1) to (3) shall apply as if any capital sum received by the person on the sale of the rights were reduced by the amount of that sum; but &#8211;<\/p>\n<p>(a)where between the purchase and the sale the person has sold part of the patent rights acquired by the person and the net proceeds of that sale consist wholly or partly of a capital sum, the amount of the reduction to be made under this subsection in respect of the subsequent sale shall itself be reduced by the amount of that sum, and<\/p>\n<p>(b)nothing in this subsection shall affect the amount of tax to be deducted and accounted for under section 238 by virtue of subsection (2) and, where any sum is deducted under section 238, any adjustment necessary to give effect to this subsection shall be made by means of repayment of tax.<\/p>\n<p>(4A)<\/p>\n<p>(a)This subsection shall apply where &#8211;<\/p>\n<p>(i)there is a sale of patent rights that constitutes a disposal for the purposes of the Capital Gains Tax Acts, and<\/p>\n<p>(ii)the person selling the patent rights would be chargeable to capital gains tax in respect of that sale but for the net proceeds of the sale being excluded from the computation of the gain accruing on that disposal by virtue of section 551.<\/p>\n<p>(b)Where, but for the application of this section, section 617 would apply to a sale referred to in paragraph (a), then &#8211;<\/p>\n<p>(i)section 617 and Chapter 1 of Part 20 and Chapter 2 of Part 9, in so far as those Chapters relate to section 617, shall apply for the purposes of a charge to tax under this section as those provisions apply for the purposes of the Capital Gains Tax Acts, with any necessary modifications, and<\/p>\n<p>(ii)in applying section 617 to a sale referred to in paragraph (a), references in this section to the capital sum received for the sale of patent rights for the purposes of this section shall be read as references to the consideration referred to in section 617(1).<\/p>\n<p>(5)This section shall apply in relation to any sale of part of any patent rights as it applies in relation to sales of patent rights.<\/p>\n<p>(6)<\/p>\n<p>(a)This section shall not apply to a sale which results in the purchaser being entitled to have their title as applicant, or co-applicant, for the patent, or proprietor, or co-proprietor, of the patent, registered in the Register of Patents under the Patents Act 1992 or in accordance with the analogous law of another jurisdiction, or being absolutely entitled as against the applicant, or co-applicant, for the patent, or proprietor, or co-proprietor, of the patent.<\/p>\n<p>(b)In this section, &#8220;applicant&#8221; and &#8220;proprietor of the patent&#8221; shall have the same meaning, respectively, as they have in the Patents Act 1992 and &#8220;co-applicant&#8221; and &#8220;co-proprietor&#8221; shall be construed accordingly.<\/p>\n<p>758.<\/p>\n<h4>Relief for expenses.<\/h4>\n<p>(1)Notwithstanding section 81, in computing the profits or gains of any trade, there shall be allowed to be deducted as expenses any fees paid or expenses incurred in obtaining for the purposes of the trade the grant of a patent or an extension of the term of a patent.<\/p>\n<p>(2)Where &#8211;<\/p>\n<p>(a)a person, otherwise than for the purposes of a trade carried on by the person, pays any fees or incurs any expenses in connection with the grant or maintenance of a patent or the obtaining of an extension of a term of a patent, and<\/p>\n<p>(b)those fees or expenses would, if they had been paid or incurred for the purposes of a trade, have been allowable as a deduction in estimating the profits or gains of the trade,<\/p>\n<p>there shall be made to the person for the chargeable period in which those fees or expenses were paid or incurred an allowance equal to the amount of those fees or expenses.<\/p>\n<p>(3)Where a patent is granted in respect of any invention, an allowance equal to so much of the net amount of any expenses incurred by an individual who, whether alone or in conjunction with any other person, actually devised the invention as is properly ascribable to the devising of that invention (not being expenses in respect of which, or of assets representing which, an allowance is to be made under any other provision of the Tax Acts) shall be made to that individual for the year of assessment in which the expenses were incurred.<\/p>\n<p>759.<\/p>\n<h4>Spreading of revenue payments over several years.<\/h4>\n<p>(1)In this section, any reference to the tax payable by a person includes, in cases where the income of an individual&#8217;s spouse is deemed to be the income of the individual, references to the income tax payable by the individual&#8217;s spouse or civil partner.<\/p>\n<p>(2)Where a royalty or other sum to which section 237 or 238 applies is paid in respect of the user of a patent and that user extended over a period of 6 complete years or more, the person receiving the payment may require that the tax payable by that person by reason of the receipt of that sum shall be reduced so as not to exceed the total amount of tax which would have been payable by that person if that royalty or sum had been paid in 6 equal instalments at yearly intervals, the last of which was paid on the date on which the payment was in fact made.<\/p>\n<p>(3)Subsection (2) shall apply in relation to a royalty or other sum where the period of the user is 2 complete years or more but less than 6 complete years as it applies to the royalties and sums mentioned in that subsection, but with the substitution for the reference to 6 equal instalments of a reference to so many equal instalments as there are complete years comprised in that period.<\/p>\n<p>(4)Nothing in this section shall apply to any sum to which section 238 applies by virtue of section 757.<\/p>\n<p>760.<\/p>\n<h4>Capital sums: effect of death, winding up and partnership changes.<\/h4>\n<p>(1)In this section, any references to tax paid or borne or payable or to be paid or borne by a person include, in cases where the income of an individual&#8217;s spouse is deemed to be income of the individual, references to the income tax paid or borne, or payable or to be paid or borne, by the individual&#8217;s spouse or civil partner.<\/p>\n<p>(2)Where a person on whom, by reason of the receipt of a capital sum, a charge is to be, or would otherwise be, made under section 757 dies or, being a body corporate, commences to be wound up &#8211;<\/p>\n<p>(a)no sums shall be charged under that section on that person for any chargeable period subsequent to that in which the death takes place or the winding up commences, and<\/p>\n<p>(b)the amount to be charged for the chargeable period in which the death occurs or the winding up commences shall be increased by the total amounts which but for the death or winding up would have been charged for subsequent chargeable periods.<\/p>\n<p>(3)<\/p>\n<p>(a)In the case of a death, the personal representatives may, by notice in writing served on the inspector not later than 21 days after notice has been served on them of the charge to be made by virtue of this section, require that the tax payable out of the estate of the deceased by reason of the increase provided for by this section shall be reduced so as not to exceed the amount determined in accordance with paragraph (b).<\/p>\n<p>(b)The amount referred to in paragraph (a) shall be the total amount of tax which would have been payable by the deceased or out of his or her estate by reason of the operation of section 757 in relation to the capital sum if, instead of the amount to be charged for the year in which the death occurs being increased by the whole amount of the sums charged for subsequent years, the several amounts to be charged for the years beginning with that in which the capital sum was received and ending with that in which the death occurred had each been increased by that whole amount divided by the number of those years.<\/p>\n<p>(4)<\/p>\n<p>(a)In this subsection, &#8220;the relevant period&#8221; has the same meaning as in Part 43.<\/p>\n<p>(b)Where, under Chapter 4 of Part 9 as modified by Part 43, charges under section 757 are to be made on 2 or more persons as being the persons for the time being carrying on a trade, and the relevant period comes to an end, subsection (2) shall apply in relation to the ending of the relevant period as it applies where a body corporate commences to be wound up.<\/p>\n<p>(c)Where paragraph (b) applies &#8211;<\/p>\n<p>(i)the additional sums which under subsection (2) are to be charged for the year in which the relevant period ends shall be aggregated and apportioned among the members of the partnership immediately before the ending of the relevant period according to their respective interests in the partnership profits at that time and each partner (or, if that partner is dead, his or her personal representatives) charged for his or her proportion, and<\/p>\n<p>(ii)each partner (or, if that partner is dead, his or her personal representatives) shall have the same right to require a reduction of the total tax payable by him or her or out of his or her estate by reason of the increase provided for by this section as would have been exercisable by the personal representatives under subsection (3) in the case of a death, and that subsection shall apply accordingly but as if the reference to the amount of tax which would have been payable by the deceased or out of his or her estate in the event mentioned in that subsection were a reference to the amount of tax which would in that event have been paid or borne by the partner in question or out of his or her estate.<\/p>\n<p>761.<\/p>\n<h4>Manner of making allowances and charges.<\/h4>\n<p>(1)An allowance or charge under this Chapter shall be made to or on a person in taxing the person&#8217;s trade if &#8211;<\/p>\n<p>(a)the person is carrying on a trade the profits or gains of which are, or, if there were any, would be, chargeable to tax under Case I of Schedule D for the chargeable period for which the allowance or charge is made, and<\/p>\n<p>(b)at any time in the chargeable period or its basis period the patent rights in question, or other rights out of which they were granted, were or were to be used for the purposes of that trade;<\/p>\n<p>but nothing in this subsection shall affect the preceding provisions of this Chapter allowing a deduction as expenses in computing the profits or gains of a trade or requiring a charge to be made under Case IV of Schedule D.<\/p>\n<p>(2)Except where provided for in subsection (1), an allowance under this Chapter shall be made by means of discharge or repayment of tax and shall be available against income from patents, and a charge under this Chapter shall be made under Case IV of Schedule D.<\/p>\n<p>762.<\/p>\n<h4>Application of Chapter 4 of Part 9.<\/h4>\n<p>(1)Subject to subsection (2), Chapter 4 of Part 9 shall apply as if this Chapter were contained in that Part, and any reference in the Tax Acts to any capital allowance to be given by means of discharge or repayment of tax and to be available or available primarily against a specified class of income shall include a reference to any capital allowance given in accordance with section 761(2).<\/p>\n<p>(2)In Chapter 4 of Part 9, as applied by virtue of subsection (1) to patent rights &#8211;<\/p>\n<p>(a)the reference in section 312(5)(a)(i) to the sum mentioned in paragraph (b) shall in the case of patent rights be construed as a reference to the amount of the capital expenditure on the acquisition of the patent rights remaining unallowed, computed in accordance with section 756, and<\/p>\n<p>(b)the reference in section 316(1) to any expenditure or sum in the case of which a deduction of tax is to be or may be made under section 237 or 238 shall not include a sum in the case of which such a deduction is to be or may be so made by virtue of section 757.<\/p>\n<p>Chapter 2<\/p>\n<h4>Scientific and certain other research (ss. 763-767)<\/h4>\n<p>763.<\/p>\n<h4>Interpretation (sections 764 and 765).<\/h4>\n<p>(1)In this section &#8211;<\/p>\n<p>&#8220;designated area&#8221; has the same meaning as it has in the Maritime Jurisdiction Act 202;<\/p>\n<p>&#8220;exploring for specified minerals&#8221; means searching in the State for deposits of specified minerals or testing such deposits or winning access to such deposits, and includes the systematic searching for areas containing specified minerals and searching by drilling or other means for specified minerals within those areas, but does not include operations in the course of developing or working a mine;<\/p>\n<p>&#8220;licence&#8221; means &#8211;<\/p>\n<p>(a)an exploration licence,<\/p>\n<p>(b)a petroleum prospecting licence,<\/p>\n<p>(c)a petroleum lease, or<\/p>\n<p>(d)a reserved area licence, duly granted before the 11th day of June, 1968, in respect of an area in the State, or on or after the 11th day of June, 1968, in respect of either or both a designated area and an area in the State, and which was or may be so granted subject to such licensing terms as were presented to each House of the Oireachtas, and includes any such licence the terms of which have been duly amended or varied from time to time;<\/p>\n<p>&#8220;licensed area&#8221; means an area in respect of which a licence is in force;<\/p>\n<p>&#8220;mine&#8221; means an underground excavation for the purpose of getting specified minerals;<\/p>\n<p>&#8220;petroleum&#8221; includes &#8211;<\/p>\n<p>(a)any mineral oil or relative hydrocarbon and natural gas and other liquid or gaseous hydrocarbons and their derivatives or constituent substances existing in its natural condition in strata (including, without limitation, distillate, condensate, casinghead gasoline and such other substances as are ordinarily produced from oil and gas wells), and<\/p>\n<p>(b)any other mineral substance contained in oil or natural gas brought to the surface with them in the normal process of extraction, but does not include coal and bituminous shales and other stratified deposits from which oil can be extracted by distillation,<\/p>\n<p>won or capable of being won under the authority of a licence;<\/p>\n<p>&#8220;petroleum exploration activities&#8221; means activities of a person carried on by the person or on behalf of the person in searching for deposits in a licensed area, in testing or appraising such deposits or in winning access to such deposits for the purposes of such searching, testing and appraising, where such activities are carried on under a licence (other than a petroleum lease) authorising the activities and held by the person or, if the person is a company, held by the company or a company associated with it;<\/p>\n<p>&#8220;petroleum extraction activities&#8221; means activities of a person carried on by the person or on behalf of the person under a petroleum lease authorising the activities and held by the person or, if the person is a company, held by the company or a company associated with it in &#8211;<\/p>\n<p>(a)winning petroleum from a relevant field, including searching in that field for, and winning access to, such petroleum,<\/p>\n<p>(b)transporting as far as dry land petroleum so won from a place not on dry land, or<\/p>\n<p>(c)effecting the initial treatment and storage of petroleum so won from the relevant field;<\/p>\n<p>&#8220;relevant field&#8221; means an area in respect of which a licence, being a petroleum lease, is in force;<\/p>\n<p>&#8220;specified minerals&#8221; means the following minerals occurring in non-bedded deposits of such minerals, that is, barytes, felspar, serpentinous marble, quartz rock, soapstone, ores of copper, ores of gold, ores of iron, ores of lead, ores of manganese, ores of molybdenum, ores of silver, ores of sulphur and ores of zinc.<\/p>\n<p>(2)In sections 764 and 765 &#8211;<\/p>\n<p>&#8220;asset&#8221; includes part of an asset;<\/p>\n<p>&#8220;expenditure on scientific research&#8221; does not include any expenditure incurred in the acquisition of rights in or arising out of scientific research;<\/p>\n<p>&#8220;scientific research&#8221; means, subject to subsections (3) and (4), any activities in the fields of natural or applied science for the extension of knowledge.<\/p>\n<p>(3)For the purposes of the definition of &#8220;scientific research&#8221;, that definition shall, subject to subsection (4), be construed as including and be deemed always to have included a provision excluding from that definition the following activities &#8211;<\/p>\n<p>(a)exploring for specified minerals,<\/p>\n<p>(b)petroleum exploration activities, and<\/p>\n<p>(c)petroleum extraction activities.<\/p>\n<p>(4)As respects activities carried on before the 29th day of January, 1992, subsection (3) shall not apply for the purpose of computing any charge to income tax or corporation tax on a person who has before the 3rd day of December, 1991, made a claim in respect of expenditure incurred in exploring for specified minerals or in respect of petroleum exploration activities or in respect of petroleum extraction activities.<\/p>\n<p>(5)For the purposes of sections 764 and 765, expenditure shall not be regarded as incurred by a person in so far as it is or is to be met directly or indirectly out of moneys provided by the Oireachtas or by any person other than the first-mentioned person.<\/p>\n<p>(6)The same expenditure shall not be taken into account for any of the purposes of section 764 or 765 in relation to more than one trade.<\/p>\n<p>764.<\/p>\n<h4>Deduction for revenue expenditure on scientific research.<\/h4>\n<p>(1)Where a person carrying on a trade either &#8211;<\/p>\n<p>(a)incurs non-capital expenditure on scientific research relating to the trade, or<\/p>\n<p>(b)pays any sum to &#8211;<\/p>\n<p>(i)a body carrying on scientific research and approved for the purposes of this section by the Minister for Finance, or<\/p>\n<p>(ii)an Irish university,<\/p>\n<p>in order that such body or university may undertake scientific research,<\/p>\n<p>then, the expenditure so incurred or the sum so paid shall be deducted as an expense in computing the profits or gains of the trade.<\/p>\n<p>(2)Where a person carrying on a trade &#8211;<\/p>\n<p>(a)incurs non-capital expenditure on scientific research or pays any sum to a body or university referred to in subsection (1)(b) in order that the body or university may undertake scientific research, and<\/p>\n<p>(b)the expenditure so incurred or the sum so paid is not deductible as an expense under subsection (1) because the scientific research is not related to any trade being carried on by the person,<\/p>\n<p>then, the expenditure so incurred or the sum so paid shall be deducted as an expense in computing the profits or gains of the person&#8217;s trade.<\/p>\n<p>765.<\/p>\n<h4>Allowances for capital expenditure on scientific research.<\/h4>\n<p>(1)Where a person &#8211;<\/p>\n<p>(a)incurs capital expenditure on scientific research-<\/p>\n<p>(i)other than on a building or structure, or<\/p>\n<p>(ii)on any building or structure to the extent only that the construction or development of such building or structure is scientific research,<\/p>\n<p>(b)<\/p>\n<p>(i)is then carrying on a trade to which such expenditure relates, or<\/p>\n<p>(ii)subsequently sets up and commences a trade which is related to such research,<\/p>\n<p>(c)applies for an allowance under this subsection in respect of such expenditure, and<\/p>\n<p>(d)so applies &#8211;<\/p>\n<p>(i)in the case where the expenditure was incurred while carrying on the trade, within 24 months after the end of the chargeable period in which it was incurred, or<\/p>\n<p>(ii)in the case where the expenditure was incurred before the setting up and commencement of the trade, within 24 months after the end of the chargeable period in which the trade was set up and commenced,<\/p>\n<p>and any asset representing such capital expenditure on scientific research is in use for the purposes of scientific research at the end of the chargeable period.<\/p>\n<p>(2)Where a person carrying on a trade incurs capital expenditure on scientific research in respect of which an allowance may not be made under subsection (1) because the scientific research is not related to any trade being carried on by that person, there shall be made in taxing that person&#8217;s trade for the chargeable period in which the expenditure was incurred an allowance equal to the amount of the expenditure.<\/p>\n<p>(3)Where an asset representing capital expenditure on scientific research ceases at any time from any cause whatever to be used for such research, relating to the trade carried on by the person who incurred the expenditure, then &#8211;<\/p>\n<p>(a)an amount equal to the allowance made under this section in respect of that expenditure, or, if the value of the asset immediately before the cessation is less than that allowance, equal to that value, shall be treated as a trading receipt of the trade accruing immediately before the cessation, and<\/p>\n<p>(b)in the application of section 284 to an allowance made in respect of the asset for any chargeable period after that in which the cessation takes place, the actual cost of the asset shall be treated as being reduced by the amount of the allowance effectively made.<\/p>\n<p>(4)Where an allowance under this section is made to a person for any chargeable period in respect of expenditure represented wholly or partly by assets, no allowance in respect of those assets shall be made to that person under section 85 or 284 for that or any subsequent chargeable period.<\/p>\n<p>(5)Section 304(4) shall apply in relation to an allowance under subsection (1) or (2) as it applies in relation to allowances to be made under Part 9.<\/p>\n<p>766.<\/p>\n<h4>Tax credit for research and development expenditure.<\/h4>\n<p>(1)<\/p>\n<p>(a)In this section and in section 766C &#8211;<\/p>\n<p>&#8216;authorised officer&#8217; means an officer of the Revenue Commissioners authorised by them in writing for the purposes of this section;<\/p>\n<p>&#8216;EEA Agreement&#8217; means the Agreement on the European Economic Area signed at Oporto on 2 May 1992 as adjusted by the Protocol signed at Brussels on 17 March 1993;<\/p>\n<p>&#8216;expenditure on research and development&#8217;, in relation to a company, means expenditure, other than expenditure on a building or structure, incurred by the company wholly and exclusively in the carrying on by it of research and development activities in a relevant Member State, being expenditure &#8211;<\/p>\n<p>(i)which &#8211;<\/p>\n<p>(I)is allowable for the purposes of tax in the State as a deduction in computing income from a trade (otherwise than by virtue of section 307), or would be so allowable but for the fact that for accounting purposes it is brought into account in determining the value of an intangible asset, or<\/p>\n<p>(II)is relieved under Part 8,<\/p>\n<p>(ii)on machinery or plant (other than a specified intangible asset within the meaning of section 291A treated as machinery or plant by virtue of subsection (2) of that section) which qualifies for any allowance under Part 9, or<\/p>\n<p>(iii)which qualifies for an allowance under section 764, but &#8211;<\/p>\n<p>(I)expenditure on research and development shall not include a royalty or other sum paid by a company in respect of the user of an invention &#8211;<\/p>\n<p>(A)if the royalty or other sum is paid to a person who is connected with the company within the meaning of section 10 and is part of overall income from a qualifying asset within the meaning of section 769G, or<\/p>\n<p>(B)to the extent to which the royalty or other sum exceeds the royalty or other sum which would have been paid if the payer of the royalty or other sum and the beneficial recipient of the royalty or other sum were independent persons acting at arm&#8217;s length,<\/p>\n<p>(IA)expenditure by a company on research and development shall not include any amount of interest notwithstanding that such interest is brought into account by the company in determining the value of an asset,<\/p>\n<p>(IB)expenditure on research and development shall not include &#8211;<\/p>\n<p>(A)except as provided for in subparagraphs (vii) and (viii) of subsection (1)(b), any amount paid to another person to carry on research and development activities, or<\/p>\n<p>(B)expenditure incurred by a company in the management or control of research and development activities where such activities are carried on by another person,<\/p>\n<p>and &#8216;in the carrying on by it of research and development activities&#8217; shall be construed accordingly, and<\/p>\n<p>(II)expenditure incurred by a company which is resident in the State shall not be expenditure on research and development if it &#8211;<\/p>\n<p>(A)may be taken into account as an expense in computing income of the company,<\/p>\n<p>(B)is expenditure in respect of which an allowance for capital expenditure may be made to the company, or<\/p>\n<p>(C)may otherwise be allowed or relieved in relation to the company, for the purposes of tax in a territory other than the State;<\/p>\n<p>&#8216;group expenditure on research and development&#8217;, in relation to a relevant period of a group of companies, means the aggregate of the amounts of expenditure on research and development incurred in the relevant period by qualified companies which for the relevant period are members of the group: but &#8211;<\/p>\n<p>(i)expenditure incurred by a company which is a member of a group for a part of a relevant period shall only be included in group expenditure on research and development if the expenditure is incurred at a time when the company is a member of the group, and<\/p>\n<p>(ii)expenditure on research and development incurred by a company which has been included in group expenditure on research and development in relation to a group shall not be included in group expenditure on research and development in relation to any other group;<\/p>\n<p>&#8216;key employee&#8217; has the meaning ascribed to it by section 472D;<\/p>\n<p>&#8216;qualified company&#8217;, in relation to a relevant period, means a company which &#8211;<\/p>\n<p>(i)throughout the relevant period &#8211;<\/p>\n<p>(I)carries on a trade,<\/p>\n<p>(II)is a 51 per cent subsidiary of a company which carries on a trade, or<\/p>\n<p>(III)is a 51 per cent subsidiary of a company whose business consists wholly or mainly of the holding of stocks, shares or securities of a company which carries on a trade or more than one such company,<\/p>\n<p>(ii)carries out research and development activities in the relevant period,<\/p>\n<p>(iii)maintains a record of expenditure incurred by it in the carrying out by it of those activities, and<\/p>\n<p>(iv)in the case of a company which is a member of a group of companies that carries on research and development activities in separate geographical locations, maintains separate records of expenditure incurred in respect of the activities carried on at each location;<\/p>\n<p>&#8216;qualifying group expenditure on research and development&#8217;, in relation to &#8211;<\/p>\n<p>(a)relevant periods commencing on or after 1 January 2015, shall have the same meaning as that assigned to &#8216;group expenditure on research and development&#8217;, and<\/p>\n<p>(b)a relevant period commencing on or before 31 December 2014, shall be determined by the following formula &#8211;<\/p>\n<p>A + B<\/p>\n<p>where &#8211;<\/p>\n<p>Ais so much of the amount of group expenditure on research and development in relation to a relevant period as does not exceed \u20ac300,000, and<\/p>\n<p>Bis the amount equal to the excess of the amount of group expenditure on research and development in relation to the relevant period over the threshold amount in relation to the relevant period,<\/p>\n<p>but the amount of qualifying group expenditure on research and development in relation to a relevant period shall not exceed the amount of group expenditure on research and development in relation to that relevant period;<\/p>\n<p>&#8216;relevant Member State&#8217; means &#8211;<\/p>\n<p>(i)a state which is a Member State of the European Union, or<\/p>\n<p>(ii)not being such a Member State, a state which is a contracting party to the EEA Agreement,<\/p>\n<p>and, in addition to what is specified in subparagraphs (i) and (ii), shall be deemed to include the United Kingdom but, for the purposes of the definition of &#8216;Member State&#8217; in section 769G(1), the portion of this definition that extends to the United Kingdom shall not apply;<\/p>\n<p>&#8216;relevant period&#8217; means &#8211;<\/p>\n<p>(i)in the case of companies which are members of a group the respective ends of the accounting periods of the members of which coincide, the period of 12 months throughout which one or more members of the group carries on a trade and ending at the end of the first accounting period which commences on or after 1 January 2004, and<\/p>\n<p>(ii)in the case of companies which are members of a group the respective ends of the accounting periods of which do not coincide, the period specified in a notice in writing made jointly by companies which are members of the group and submitted within a period of 9 months after the end of the period so specified, being a period of 12 months throughout which one or more members of the group carries on a trade and ending at the end of the first accounting period of a company which is a member of the group which accounting period commences on or after 1 January 2004, and each subsequent period of 12 months commencing immediately after the end of the preceding relevant period;<\/p>\n<p>&#8216;research and development activities&#8217; means systematic, investigative or experimental activities in a field of science or technology, being one or more of the following &#8211;<\/p>\n<p>(i)basic research, namely, experimental or theoretical work undertaken primarily to acquire new scientific or technical knowledge without a specific practical application in view,<\/p>\n<p>(ii)applied research, namely, work undertaken in order to gain scientific or technical knowledge and directed towards a specific practical application, or<\/p>\n<p>(iii)experimental development, namely, work undertaken which draws on scientific or technical knowledge or practical experience for the purpose of achieving technological advancement and which is directed at producing new, or improving existing, materials, products, devices, processes, systems or services including incremental improvements thereto:<\/p>\n<p>but activities will not be research and development activities unless they &#8211;<\/p>\n<p>(I)seek to achieve scientific or technological advancement, and<\/p>\n<p>(II)involve the resolution of scientific or technological uncertainty;<\/p>\n<p>&#8216;research and development centre&#8217; means a fixed base or bases, established in buildings or structures, which are used for the purpose of the carrying on by a company of research and development activities;<\/p>\n<p>&#8216;specified amount&#8217; means an amount &#8211;<\/p>\n<p>(i)paid by the Revenue Commissioners in accordance with subsection (4B) of this section or section 766A(4B), as the case may be, or<\/p>\n<p>(ii)surrendered in accordance with subsection (2A),<\/p>\n<p>and a claim in respect of a specified amount shall be construed accordingly;<\/p>\n<p>&#8216;threshold amount&#8217;, in relation to a relevant period of a group of companies, means the aggregate of the amounts of expenditure on research and development incurred in the period of one year ending on a date in the year 2003, which corresponds with the date on which the relevant period ends by all companies which are members of the group in the threshold period, in relation to the relevant period concerned: but &#8211;<\/p>\n<p>(i)expenditure incurred by a company which is a member of the group for a part of the threshold period shall only be included in the threshold amount if the expenditure is incurred at a time when the company is a member of the group, and<\/p>\n<p>(ii)subject to subsection (7C)(a) &#8211;<\/p>\n<p>(I)where at any time during the threshold period, a group of companies carried on research and development activities in more than one research and development centre and each centre is in a separate geographical location, and<\/p>\n<p>(II)at a time (referred to in this section as the &#8216; cessation time&#8217;) after the end of the threshold period, a research and development centre ceases to be used for the purposes of a trade by a company which is a member of the group of companies and is not so used by any other company which is a member of the group,<\/p>\n<p>then expenditure incurred in relation to that research and development centre shall not be taken into account in calculating the threshold amount in relation to any relevant period which commences after the cessation time<\/p>\n<p>&#8216;threshold period&#8217;, in relation to a relevant period, means the period of one year referred to in the definition of &#8216;threshold amount&#8217;;<\/p>\n<p>&#8216;university or institute of higher education&#8217; means &#8211;<\/p>\n<p>(i)a college or institution of higher education in the State which &#8211;<\/p>\n<p>(I)provides courses to which a scheme approved by the Minister for Education and Science under the Local Authorities (Higher Education Grants) Acts 1968 to 1992 applies, or<\/p>\n<p>(II)operates in accordance with a code of standards which from time to time may, with the consent of the Minister for Finance, be laid down by the Minister for Education and Science, and which the Minister for Education and Science approves for the purposes of section 473A;<\/p>\n<p>(ii)any university or similar institution of higher education in a relevant Member State (other than the State) which &#8211;<\/p>\n<p>(I)is maintained or assisted by recurrent grants from public funds of that or any other relevant Member State (including the State), or<\/p>\n<p>(II)is a duly accredited university or institution of higher education in the Member State in which it is situated.<\/p>\n<p>(b)For the purposes of this section and section 766C &#8211;<\/p>\n<p>(i)2 companies shall be deemed to be members of a group if one company is a 51 per cent subsidiary of the other company or both companies are 51 per cent subsidiaries of a third company: but in determining whether one company is a 51 per cent subsidiary of another company, the other company shall be treated as not being the owner of &#8211;<\/p>\n<p>(I)any share capital which it owns directly in a company if a profit on a sale of the shares would be treated as a trading receipt of its trade, or<\/p>\n<p>(II)any share capital which it owns indirectly, and which is owned directly by a company for which a profit on a sale of the shares would be a trading receipt;<\/p>\n<p>(ii)sections 412 to 418 shall apply for the purposes of this paragraph as they would apply for the purposes of Chapter 5 of Part 12 if &#8211;<\/p>\n<p>(I)&#8217;51 per cent subsidiary&#8217; were substituted for &#8217;75 per cent subsidiary&#8217; in each place where it occurs in that Chapter, and<\/p>\n<p>(II)paragraph (c) of section 411(1) were deleted;<\/p>\n<p>(iii)a company and all its 51 per cent subsidiaries shall form a group and, where that company is a member of a group as being itself a 51 per cent subsidiary, that group shall comprise all its 51 per cent subsidiaries and the first-mentioned group shall be deemed not to be a group: but a company which is not a member of a group shall be treated as if it were a member of a group which consists of that company;<\/p>\n<p>(iv)in determining whether a company was a member of a group of companies (in this subparagraph referred to as the &#8216;threshold group&#8217;) for the purposes of determining the threshold amount in relation to a relevant period of a group of companies (in this subparagraph referred to as the &#8216;relevant group&#8217;), the threshold group shall be treated as the same group as the relevant group notwithstanding that one or more of the companies in the threshold group is not in the relevant group, or vice versa, where any person or group of persons which controlled the threshold group is the same as, or has a reasonable commonality of identity with, the person or group of persons which controls the relevant group;<\/p>\n<p>(v)expenditure shall not be regarded as having been incurred by a company if it has been or is to be met directly or indirectly by grant assistance or any other assistance which is granted by or through &#8211;<\/p>\n<p>(I)the State or another relevant Member State or the European Union, or<\/p>\n<p>(II)any board established by statute, any public or local authority or any other agency of the State or another relevant Member State or an institution, office, agency or other body of the European Union, or<\/p>\n<p>(III)a state, other than the State or a Member State referred to in clause (I), and any board, authority, institution, office, agency or other body in such state;<\/p>\n<p>(vi)where a company &#8211;<\/p>\n<p>(I)incurs expenditure on research and development at a time when the company is not carrying on a trade, being expenditure which, apart from this subparagraph, is not included in group expenditure on research and development,<\/p>\n<p>(II)begins to carry on a trade after that time, and<\/p>\n<p>(III)makes a claim in respect of expenditure incurred at a time referred to in clause (I),<\/p>\n<p>the expenditure shall be treated &#8211;<\/p>\n<p>(A)for the purpose only of subsection (5), as incurred at the time the company begins to carry on the trade,<\/p>\n<p>(B)for the purposes of subsection (2), as it would if the company had commenced to carry on a trade at the time the expenditure was incurred, and the amount of any credit computed thereon shall be carried forward in accordance with subsection (4) and treated as an amount by which the corporation tax of the first accounting period which commenced on or after the time the company begins to trade is reduced, and<\/p>\n<p>(C)for the purposes of section 766C(1), as it would if it was incurred in the first accounting period which commenced on or after the time the company begins to trade;<\/p>\n<p>(vii)where in any period a company &#8211;<\/p>\n<p>(I)incurs expenditure on research and development, and<\/p>\n<p>(II)pays a sum to a university or institute of higher education in order for that university or institute to carry on research and development activities in a relevant Member State,<\/p>\n<p>so much of the sum so paid as does not exceed the greater of 15 per cent of that expenditure or \u20ac100,000, shall, to the extent that it does not exceed the expenditure referred to in clause (I), be treated as if it were expenditure incurred by the company in the carrying on by it of research and development activities,<\/p>\n<p>(viii)where in any period a company &#8211;<\/p>\n<p>(I)incurs expenditure on research and development, and<\/p>\n<p>(II)pays a sum (not being a sum referred to in clause (II) of subparagraph (vii)) to a person, other than to a person who is connected (within the meaning of section 10) with the company, in order for that person to carry on research and development activities, and notifies that person in writing, in advance of making the payment or on the date the payment is made, that the payment is a payment to which this clause applies and that the person may not make a claim under this section in respect of such research and development activities,<\/p>\n<p>then, so much of the sum so paid as does not exceed the greater of 15 per cent of that expenditure or \u20ac100,000, shall, to the extent that it does not exceed the expenditure referred to in clause (I), be treated as if it were expenditure incurred by the company in the carrying on by it of research and development activities and expenditure incurred by that other person in connection with the activities referred to in clause (II) shall not be expenditure on research and development;<\/p>\n<p>(ix)A research and development centre used by a company which is a member of a group of companies will be treated as being in a separate geographical location to another research and development centre used by the company or another company which is a member of the group if it is not less than a distance of 20 kilometres from that other research and development centre.<\/p>\n<p>(c)[deleted]<\/p>\n<p>(1A)<\/p>\n<p>For the purposes of this section and section 766C &#8211;<\/p>\n<p>(a)where expenditure is incurred by a company on machinery or plant which qualifies for any allowance under Part 9 and the machinery or plant will not be used by the company wholly and exclusively for the purposes of research and development, the amount of the expenditure attributable to research and development shall be such portion of that expenditure as is just and reasonable, and such portion of the expenditure shall be treated for the purposes of subsection (1)(a) as incurred by the company wholly and exclusively in carrying on research and development activities, and<\/p>\n<p>(b)where, at any time, the apportionment made under paragraph (a), or a further apportionment made under this paragraph, ceases to be just and reasonable, then &#8211;<\/p>\n<p>(i)such further apportionment shall be made at that time as is just and reasonable,<\/p>\n<p>(ii)any such further apportionment shall supersede any earlier apportionment, and<\/p>\n<p>(iii)any such adjustments, assessments or repayments of tax shall be made as are necessary to give effect to any apportionment under this subsection.<\/p>\n<p>(2)Subject to subsection (2A) where for any accounting period a company makes a claim in that behalf, the corporation tax of the company for that accounting period shall be reduced by an amount equal to 25 per cent of qualifying expenditure attributable to the company as is referable to the accounting period.<\/p>\n<p>(2A)<\/p>\n<p>(a)Subject to paragraph (c), where as respects any accounting period a company is entitled to reduce the corporation tax of that accounting period by an amount, in accordance with subsection (2), the company may instead on making a claim in that behalf surrender all or part of that amount to one or such number of key employees as the company may specify but the aggregate of such amounts, attributable to such employees, may not exceed the amount so surrendered.<\/p>\n<p>(b)The part of that amount that may be surrendered by the company may not exceed the corporation tax of the accounting period, which would be chargeable, if no claim could be made in accordance with subsection (2).<\/p>\n<p>(c)A company may not make a claim under this subsection where, at the time of making such a claim the company has a liability (within the meaning of section 960H) in respect of the corporation tax of the accounting period referred to in subsection (2) or a previous accounting period.<\/p>\n<p>(d)A claim in accordance with this subsection shall be made in such form as the Revenue Commissioners may prescribe and the company shall notify the key employee, in writing, of any amount surrendered to that employee.<\/p>\n<p>(2B)Where as respects any accounting period a company makes a claim under subsections (2) and (2A) and in accordance with that claim &#8211;<\/p>\n<p>(a)the corporation tax of an accounting period is reduced and an amount is surrendered, and<\/p>\n<p>(b)either or both the amount so reduced or surrendered, as the case may be, is subsequently found not to have been as is authorised by this section,<\/p>\n<p>then, the amount which is not so authorised shall be first attributable to a claim under subsection (2) in priority to a claim under subsection (2A).<\/p>\n<p>(2C)Where in respect of an accounting period, a company makes a claim under subsection (2A) and it is subsequently found that the amount surrendered in accordance with that claim (hereafter in this section referred to as the &#8216;initial amount&#8217;) is not as authorised by this section, then, in relation to each key employee, the amount surrendered, which is authorised by this section, shall be an amount (hereafter in this section referred to as the &#8216;relevant authorised amount&#8217;) determined by the formula &#8211;<\/p>\n<p>A * B<\/p>\n<p>___<\/p>\n<p>C<\/p>\n<p>where &#8211;<\/p>\n<p>Ais the portion of the initial amount attributable to that key employee in accordance with the claim under subsection (2A),<\/p>\n<p>Bis the aggregate amount that may be surrendered by the company for that accounting period as is authorised by this section, and<\/p>\n<p>Cis the initial amount,<\/p>\n<p>and the company shall notify the key employee in writing of the relevant authorised amount.<\/p>\n<p>(3)For the purposes of subsection (2) &#8211;<\/p>\n<p>(a)qualifying expenditure attributable to a company in relation to a relevant period shall be so much of the amount of qualifying group expenditure on research and development in the relevant period as is attributed to the company in the manner specified in a notice made jointly in writing by the qualified companies that are members of the group: but where no such notice is given means an amount determined by the formula &#8211;<\/p>\n<p>Q * C<\/p>\n<p>___<\/p>\n<p>G<\/p>\n<p>where &#8211;<\/p>\n<p>Qis the qualifying group expenditure on research and development in the relevant period,<\/p>\n<p>Cis the amount of expenditure on research and development incurred by the company in the relevant period at a time when the company is a member of the group, and<\/p>\n<p>Gis the group expenditure on research and development in the relevant period,<\/p>\n<p>(b)where a relevant period coincides with an accounting period of a company, the amount of qualifying expenditure on research and development attributable to the company as is referable to the accounting period of the company shall be the full amount of that expenditure, and<\/p>\n<p>(c)where the relevant period does not coincide with an accounting period of the company &#8211;<\/p>\n<p>(i)the qualifying expenditure on research and development attributable to the company shall be apportioned to the accounting periods which fall wholly or partly in the relevant period, and<\/p>\n<p>(ii)the amount so apportioned to an accounting period shall be treated as the amount of qualifying expenditure on research and development attributable to the company as is referable to the accounting period of the company.<\/p>\n<p>(4)Subject to subsections (4A) and (4B), where as respects any accounting period of a company the amount by which the company is entitled to reduce corporation tax of the accounting period exceeds the corporation tax of the company for the accounting period, the excess shall be carried forward and treated as an amount by which corporation tax for the next succeeding accounting period may be reduced, and so on for succeeding accounting periods.<\/p>\n<p>(4A)<\/p>\n<p>(a)Where as respects any accounting period of a company the amount by which the company is entitled to reduce corporation tax of the accounting period exceeds the corporation tax of the company for the accounting period, the company may make a claim requiring the corporation tax of the preceding accounting period ending within the time specified in paragraph (b) to be reduced by the amount of the excess.<\/p>\n<p>(b)The time referred to in paragraph (a) shall be a time immediately preceding the accounting period first mentioned in that paragraph, equal in length to that accounting period, but the amount of the reduction which may be made under paragraph (a) in the corporation tax of an accounting period falling partly before that time shall not exceed the corporation tax referable to the part of those profits proportionate to the part of the period falling within that time.<\/p>\n<p>(4B)<\/p>\n<p>(a)Where a claim under subsection (4A)(a) has been made, and the amount of the excess referred to in subsection (4A)(a) exceeds the corporation tax of the preceding accounting periods ending within the time specified in subsection (4A)(b) or where no corporation tax arises for those preceding accounting periods, the company may make a claim to have any excess remaining paid to the company by the Revenue Commissioners.<\/p>\n<p>(b)Subject to section 766B, on receipt of a claim the Revenue Commissioners shall pay any excess remaining to the company, in 3 instalments &#8211;<\/p>\n<p>(i)the first instalment shall be paid by the Revenue Commissioners not earlier than the date provided for in paragraph (b) of the definition of &#8216;specified return date for the chargeable period&#8217; as defined in section 959A, for the accounting period in which the expenditure on research and development was incurred and shall equal 33 per cent of the excess remaining,<\/p>\n<p>(ii)in respect of the second instalment &#8211;<\/p>\n<p>(I)the excess remaining, as reduced by the first instalment under subparagraph (i), shall be first treated as an amount by which the corporation tax of the accounting period next succeeding the accounting period in which the expenditure giving rise to the claim under this subsection was incurred, is reduced in accordance with subsection (4), and<\/p>\n<p>(II)the second instalment shall be paid by the Revenue Commissioners not earlier than 12 months immediately following the date referred to in subparagraph (i) and shall equal 50 per cent of the amount of the excess remaining as reduced by the aggregate of the first instalment under subparagraph (i) and the amount treated as reducing the corporation tax of an accounting period under clause (I),<\/p>\n<p>and<\/p>\n<p>(iii)in respect of the last instalment &#8211;<\/p>\n<p>(I)the excess remaining, as reduced by the first and second instalments and by the amount treated as reducing the corporation tax of an accounting period under clause (I) of subparagraph (ii), shall be first treated as an amount by which the corporation tax of the accounting period next succeeding the accounting period referred to in clause (I) of subparagraph (ii) is reduced in accordance with subsection (4), and<\/p>\n<p>(II)the last instalment shall be paid by the Revenue Commissioners not earlier than 24 months immediately following the date referred to in subparagraph (i) and shall equal the amount by which the excess remaining is reduced by the first and second instalments and by the total of the amounts by which the corporation tax of an accounting period is reduced under clause (I) of subparagraph (ii) and under clause (I) of this subparagraph.<\/p>\n<p>(4C)Where a company (in this section and section 766A referred to as the &#8216;predecessor&#8217;) which has made a claim in accordance with this section ceases to carry on a trade which includes the carrying on by it of research and development activities and another company (in this section and section 766A referred to as the &#8216;successor&#8217;) commences to carry on the trade and those research and development activities (the cessation and commencement referred to in this section and section 766A as the &#8216;event&#8217;) and &#8211;<\/p>\n<p>(a)both the predecessor and successor were, at the time of the event, members of the same group of companies within the meaning of section 411(1), and<\/p>\n<p>(b)on or at any time within 2 years after the event the trade and the research and development activities are not carried on otherwise than by the successor,<\/p>\n<p>then the successor may, to the extent that the predecessor has not used an amount to reduce the corporation tax of an accounting period in accordance with subsection (2), surrendered an amount in accordance with subsection (2A) or made a claim under subsection (4A) or (4B), carry forward any excess that the predecessor would have been entitled to carry forward in accordance with subsection (4).<\/p>\n<p>(4D)Where, in respect of a claim made in respect of an accounting period that commenced before 1 January 2022, an amount is due to be paid as &#8211;<\/p>\n<p>(a)a second instalment under subsection (4B)(b)(ii), or<\/p>\n<p>(b)a last instalment under subsection (4B)(b)(iii),<\/p>\n<p>in an accounting period that commences on or after 1 January 2022 (in this subsection referred to as the &#8216;second-mentioned accounting period&#8217;), the company may, notwithstanding subsection (5), within 12 months of the end of the second-mentioned accounting period, make a claim in the return filed under Part 41A to have the excess paid to the company by the Revenue Commissioners, notwithstanding the restrictions set out in subparagraphs (ii)(II) and (iii)(II) of subsection (4B) in relation to the period before the expiry of which the Revenue Commissioners may not make a payment of the second or last instalment, as the case may be.<\/p>\n<p>(5)Any claim under this section shall be made within 12 months from the end of the accounting period in which the expenditure on research and development, giving rise to the claim, is incurred.<\/p>\n<p>(6)<\/p>\n<p>(a)The Minister for Enterprise, Trade and Employment, in consultation with the Minister for Finance, may make regulations for the purposes of this section and section 766C providing &#8211;<\/p>\n<p>(i)that such categories of activities as may be specified in the regulations are not research and development activities, and<\/p>\n<p>(ii)that such other categories of activities as may be specified in the regulations are research and development activities.<\/p>\n<p>(b)Where regulations are to be made under this subsection, a draft of the regulations shall be laid before D\u00e1il \u00c9ireann and the regulations shall not be made until a resolution approving the draft has been passed by D\u00e1il \u00c9ireann.<\/p>\n<p>(7)<\/p>\n<p>(a)An authorised officer may in relation to a claim by a company under this section or section 766A, 766C or 766D &#8211;<\/p>\n<p>(i)consult with any person who in their opinion may be of assistance to them in ascertaining whether the expenditure incurred by the company was incurred in the carrying on by it of research and development activities, and<\/p>\n<p>(ii)notwithstanding any obligation as to secrecy or other restriction on the disclosure of information imposed by, or under, the Tax Acts or any other statute or otherwise, but subject to paragraph (b), disclose any detail in the company&#8217;s claim under this section or section 766A, 766C or 766D, which they consider necessary for the purposes of such consultation.<\/p>\n<p>(b)Before disclosing information to any person under paragraph (a), an authorised officer shall give notice in writing to the company of &#8211;<\/p>\n<p>(i)the officer&#8217;s intention to disclose information,<\/p>\n<p>(ii)the information that the officer intends to disclose, and<\/p>\n<p>(iii)the identity of the person whom the officer intends to consult,<\/p>\n<p>and shall give the company a period of 30 days after the date of the notice to show to his or her satisfaction that disclosure of such information to that person could prejudice the company&#8217;s business.<\/p>\n<p>(c)Where, on the expiry of the period referred to in paragraph (b), it is not shown to the satisfaction of the authorised officer that disclosure could prejudice the company&#8217;s business, the officer may disclose the information where he or she &#8211;<\/p>\n<p>(i)gives notice in writing to the company of his or her decision to disclose the information, and<\/p>\n<p>(ii)allows the company a period of 30 days after the date of the notice to appeal the decision to the Appeal Commissioners before disclosing the information.<\/p>\n<p>(d)A company aggrieved by a decision made under paragraph (c) in respect of it may appeal the decision to the Appeal Commissioners, in accordance with section 949I, within the period of 30 days after the date of the notice of that decision.<\/p>\n<p>(7A)Any amount payable by virtue of subsection (4B) shall not be income of the company or another company for any tax purpose.<\/p>\n<p>(7B)<\/p>\n<p>(a)Any amount payable by the Revenue Commissioners to the company or another company by virtue of subsection (4B) shall be deemed to be an overpayment of corporation tax, for the purposes only of section 960H(2).<\/p>\n<p>(b)<\/p>\n<p>(i)Any claim in respect of a specified amount shall be deemed for the purposes of section 1077E or 1077F, as appropriate, to be a claim in connection with a credit and, for the purposes of determining an amount in accordance with subsection (11) or (12), as the case may be, of section 1077E or subsection (3) or (5), as the case may be, of section 1077F, as appropriate, a reference to an amount of tax that would have been payable for the relevant periods by the person concerned shall be read as if it were a reference to a specified amount.<\/p>\n<p>(ii)Any claim in respect of a specified amount that remains unpaid shall be deemed for the purposes of section 1077E or 1077F, as appropriate, to be a claim in connection with a credit and, for the purposes of determining an amount in accordance with subsection (11) or (12), as the case may be, of section 1077E or subsection (3) or (5), as the case may be, of section 1077F, as appropriate , a reference to an amount of tax that would have been payable for the relevant periods by the person concerned shall be read as if it were a reference to the amount so claimed.<\/p>\n<p>(c)<\/p>\n<p>(i)Subject to subparagraph (ii), where a company makes a claim in respect of a specified amount and it is subsequently found that the claim is not as authorised by this section or by section 766A, as the case may be, then the company may be charged to tax under Case IV of Schedule D for the accounting period in respect of which the payment was made or the amount surrendered, as the case may be, in an amount equal to 4 times so much of the specified amount as is not so authorised.<\/p>\n<p>(ii)Where a company makes a claim under subsection (2A) and it is subsequently found that the claim is deliberately false or overstated and that the amount surrendered in accordance with that claim is not as authorised by this section, then subparagraph (i) shall not apply and the company shall be charged to tax under Case IV of Schedule D for the accounting period in respect of which the amount was surrendered in an amount equal to 8 times so much of the amount surrendered as is not so authorised.<\/p>\n<p>(iii)An amount chargeable to tax under this paragraph shall be treated &#8211;<\/p>\n<p>(I)as income against which no loss, deficit, expense or allowance may be set off, and<\/p>\n<p>(II)as not forming part of the income of the company for the purposes of calculating a surcharge under section 440,<\/p>\n<p>and no claim may be made under subsection (2), (4) or (4A) to reduce the corporation tax arising on an amount chargeable to tax under this paragraph.<\/p>\n<p>(d)Where in accordance with paragraph (c) an assessment is made in respect of a specified amount, the amount so charged shall for the purposes of section 1080 be deemed to be tax due and payable and shall carry interest as determined in accordance with subsection (2)(c) of section 1080 as if a reference to the date when the tax became due and payable were a reference to the date the amount was paid by the Revenue Commissioners, or a reference to the date the corporation tax of the company for the accounting period in respect of which the amount was surrendered, was payable, as the case may be.<\/p>\n<p>(7C)<\/p>\n<p>&nbsp;<\/p>\n<p>(a)Subparagraph (ii) of the definition of &#8216;threshold amount&#8217; shall not apply in relation to a relevant period commencing on or after 1 January 2010 (in this paragraph referred to as the &#8216;first-mentioned relevant period&#8217;) or any relevant period subsequent to that relevant period, where, at a time during that first-mentioned relevant period or any later relevant period, being a time subsequent to the cessation time &#8211;<\/p>\n<p>(i)the research and development centre referred to in clause (II) of subparagraph (ii) of the definition of &#8216;threshold amount&#8217; is used for the purposes of a trade by a company which is a member of the group, or<\/p>\n<p>(ii)activities substantially the same as the research and development activities which were carried on in that research and development centre at any time in the 48 months immediately preceding the cessation time are carried on in the State by a company which is a member of the group of companies.<\/p>\n<p>(b)Where &#8211;<\/p>\n<p>(i)by virtue of subparagraph (ii) of the definition of &#8216;threshold amount&#8217;, expenditure incurred in the threshold period is not taken into account in calculating the threshold amount in relation to a relevant period, and<\/p>\n<p>(ii)by virtue of paragraph (a) of this subsection, subparagraph (ii) of that definition does not apply in relation to a subsequent relevant period,<\/p>\n<p>then, in respect of the accounting period commencing at the same time as that subsequent relevant period or where no accounting period commences at that time, the first accounting period commencing after that time, the company referred to in subparagraph (i) or (ii) of paragraph (a), as the case may be, shall be charged to tax under Case IV of Schedule D on an amount equal to the aggregate of the amounts by which the qualifying group expenditure on research and development has been increased, as a result of a reduction in the threshold amount by virtue of subparagraph (ii) of the definition of threshold amount, for relevant periods, taking account of each relevant period in respect of which the qualifying group expenditure on research and development was so increased.<\/p>\n<p>(c)Where &#8211;<\/p>\n<p>(i)by virtue of subparagraph (ii) of the definition of &#8216;threshold amount&#8217;, expenditure incurred in the threshold period by a company which is a member of a group of companies is not taken into account in calculating the threshold amount in relation to a relevant period, and<\/p>\n<p>(ii)at any time during the period of 10 years commencing on the date on which the research and development centre ceased to be used, no company which is a member of the group is carrying on a trade which is within the charge to corporation tax,<\/p>\n<p>then, in respect of the final accounting period for which a company which is a member of the group is chargeable to corporation tax in respect of its trade, that company shall be charged to tax under Case IV of Schedule D on an amount equal to the aggregate of the amounts by which the qualifying group expenditure on research and development has been increased, as a result of a reduction in the threshold amount by virtue of subparagraph (ii) of the definition of threshold amount, for relevant periods, taking account of each relevant period in respect of which the qualifying group expenditure on research and development was so increased, as reduced by any amount charged to tax in accordance with paragraph (b).<\/p>\n<p>(8)Any functions which are authorised by subsection (7) to be performed or discharged by the Revenue Commissioners may be performed or discharged by an authorised officer and any references in subsection (7) to the Revenue Commissioners shall, with any necessary modifications, be construed as including references to the authorised officer.<\/p>\n<p>(9)<\/p>\n<p>(a)A claim shall not be made under subsection (2) or (2A) in respect of expenditure on research and development incurred in an accounting period that commences on or after 1 January 2023.<\/p>\n<p>(b)A company may, in respect of expenditure on research and development incurred in an accounting period make a claim under this section or section 766C.<\/p>\n<p>766A.<\/p>\n<h4>Tax credit on expenditure on buildings or structures used for research and development.<\/h4>\n<p>(1)<\/p>\n<p>(a)In this section and in section 766D &#8211;<\/p>\n<p>&#8216;qualified company&#8217;, &#8216;relevant member State&#8217; and &#8216;research and development activities&#8217; have the same meanings as in section 766;<\/p>\n<p>&#8216;qualifying building&#8217; means a building or structure, which is to be used for the purpose of the carrying on by the company of research and development activities in a relevant Member State, where, for the specified relevant period in relation to that building or structure, the proportion of use of the building or structure attributable to the research and development activities carried on by the company, as calculated in accordance with subsection (6), is not less than 35 per cent;<\/p>\n<p>&#8216;refurbishment&#8217;, in relation to a building or structure, means any work of construction, reconstruction, repair or renewal including the provision of water, sewerage or heating facilities carried out in the course of the repair or restoration, or maintenance in the nature of repair or restoration, of the building or structure;<\/p>\n<p>&#8216;relevant expenditure&#8217; on a building or structure, in relation to a company, means expenditure incurred by the company on the construction of a qualifying building, being expenditure which qualifies for an allowance under Part 9: but expenditure incurred by a company which is resident in the State shall not be relevant expenditure if it &#8211;<\/p>\n<p>(i)may be taken into account as an expense in computing income of the company,<\/p>\n<p>(ii)is expenditure in respect of which an allowance for capital expenditure may be made to the company, or<\/p>\n<p>(iii)may otherwise be allowed or relieved in relation to the company,<\/p>\n<p>for the purposes of tax in a territory other than the State.<\/p>\n<p>&#8216;specified relevant expenditure&#8217; means the same proportion of relevant expenditure as the research and development activities carried on in the qualifying building by the company for the specified relevant period bears to the total of all activities carried on by the company in that building for that period;<\/p>\n<p>&#8216;specified relevant period&#8217; means &#8211;<\/p>\n<p>(i)in the case of the construction of a qualifying building, the period of 4 years, commencing with the date on which the building or structure is first brought into use for the purposes of a trade,<\/p>\n<p>(ii)in the case of the refurbishment of a qualifying building, the period of 4 years, commencing with the date on which the refurbishment is completed or, such earlier period of 4 years, as the company may elect, beginning not earlier than the date on which the refurbishment commences;<\/p>\n<p>&#8216;specified time&#8217; in relation to a building or structure means the period of 10 years commencing at the beginning of the accounting period in which the predecessor incurs relevant expenditure on that building or structure;<\/p>\n<p>(b)For the purposes of this section and section 766D &#8211;<\/p>\n<p>(i)expenditure shall not be regarded as having been incurred by a company if it has been or is to be met directly or indirectly by or through &#8211;<\/p>\n<p>(I)the State or another relevant Member State or the European Union, or<\/p>\n<p>(II)any board established by statute, any public or local authority or any other agency of the State or of another relevant Member State or an institution, body, office, agency or other body of the European Union, or;<\/p>\n<p>(III)a state, other than the State or a Member State referred to in clause (I), and any board, authority, institution, office, agency or other body in such state;<\/p>\n<p>(ii)a reference to expenditure incurred on the construction of a building or structure includes expenditure on the refurbishment of the building or structure, but does not include &#8211;<\/p>\n<p>(I)any expenditure incurred on the acquisition of, or of rights in or over, any land,<\/p>\n<p>(II)any expenditure on the provision of machinery or plant or on any asset treated for any chargeable period as machinery or plant, or<\/p>\n<p>(III)any expenditure on research and development within the meaning of section 766;<\/p>\n<p>(iii)where a building or structure which is to be used for the purposes of the carrying on of research and development activities forms part of a building or is one of a number of buildings in a single development, or forms a part of a building which is itself one of a number of buildings in a single development, there shall be made such apportionment as is necessary of the expenditure incurred on the construction of the whole building or number of buildings, as the case may be, for the purpose of determining the expenditure incurred on the construction of the building or structure which is to be used for the purposes of carrying on of research and development activities,<\/p>\n<p>(iv)paragraphs (i) to (iii) of section 766(1)(b) shall apply.<\/p>\n<p>(2)Where in an accounting period a qualified company incurs relevant expenditure, the corporation tax of the company for that accounting period shall be reduced by an amount equal to 25 per cent of the specified relevant expenditure.<\/p>\n<p>(3)Where &#8211;<\/p>\n<p>(a)in an accounting period a company incurs relevant expenditure on a building or structure,<\/p>\n<p>(b)in relation to that expenditure the corporation tax of the company or another company is reduced under subsection (2) or (4A), or a payment has been made to the company or another company by the Revenue Commissioners by virtue of subsection (4B), and<\/p>\n<p>(c)at any time in the period of 10 years commencing at the beginning of that accounting period the building or structure is sold or ceases to be used by the company for the purpose of research and development activities or for the purpose of the same trade that was carried on by the company at the beginning of the specified relevant period, in connection with which the research and development activities were carried on,<\/p>\n<p>then, subject to subsection (3A), the company &#8211;<\/p>\n<p>(i)and in relation to that expenditure, another company, shall not be entitled to reduce corporation tax under subsection (2) for any accounting period ending after the time specified in paragraph (c), and<\/p>\n<p>(ii)shall be charged to tax under Case IV of Schedule D for the accounting period in which the building or structure is sold or ceases to be used for the purpose of research and development activities or for the purpose of the trade, in an amount equal to 4 times the aggregate amount by which, in respect of the company or in relation to that expenditure, another company, the corporation tax payable is reduced under subsections (2), (4) and (4A), and payments are made under subsection (4B).<\/p>\n<p>(3A)Where an event referred to in section 766(4C) occurs and &#8211;<\/p>\n<p>(a)in connection with the event the predecessor transfers to the successor a building or structure in respect of which &#8211;<\/p>\n<p>(i)the predecessor had made a claim under this section,<\/p>\n<p>(ii)the transfer is a transfer to which section 617 applies, and<\/p>\n<p>(iii)at the time of the transfer either or both the specified relevant period and the specified time had not expired,<\/p>\n<p>(b)on, or at any time within 2 years after, the event, the trade and research and development activities are not carried on otherwise than by the successor, and<\/p>\n<p>(c)the building or structure in respect of which relevant expenditure was incurred by the predecessor &#8211;<\/p>\n<p>(i)in a case where the specified relevant period had not expired, would continue to be a qualifying building if a reference, in the definition of &#8216;qualifying building&#8217; to activities carried on by the company were construed as a reference to activities carried on by the company and the successor, and<\/p>\n<p>(ii)continues to be used by the successor throughout the remainder of the &#8216;specified time&#8217; for the purposes of research and development activities,<\/p>\n<p>then &#8211;<\/p>\n<p>(I)subparagraphs (i) and (ii) of subsection (3) shall not apply in relation to the transfer by the predecessor,<\/p>\n<p>(II)the successor may, to the extent that the predecessor has not used an amount to reduce the corporation tax of an accounting period in accordance with subsection (2) or made a claim under subsection (4A) or (4B) carry forward any excess that the predecessor would have been entitled to carry forward, in accordance with subsection (4), and<\/p>\n<p>(III)subsection (3) shall have effect as if a reference to the company in subsection (3)(c) and thereafter in subsection (3) were a reference to the successor.<\/p>\n<p>(4)<\/p>\n<p>(a)Subject to paragraphs (b) and (c) and subsections (4A) and (4B), where as respects any accounting period of a company the amount by which the company is entitled under this section to reduce corporation tax of the accounting period exceeds the relevant corporation tax of the company for the accounting period, the excess shall be carried forward and treated as an amount by which corporation tax for the next succeeding accounting period may be reduced, and so on for succeeding accounting periods.<\/p>\n<p>(b)Where the company referred to in paragraph (a) is a member of a group of companies, the company may specify that the excess specified in paragraph (a), or any part of that excess, is to be treated as an amount by which corporation tax payable by another company which is a member of that group for that other company&#8217;s corresponding accounting period is to be reduced.<\/p>\n<p>(c)So much of the excess specified under paragraph (a) as is treated under paragraph (b) as an amount by which tax payable by another company is to be reduced shall not be carried forward under paragraph (a).<\/p>\n<p>(4A)<\/p>\n<p>(a)Where as respects any accounting period of a company the amount by which the company is entitled to reduce corporation tax of the accounting period exceeds the corporation tax of the company for the accounting period, the company may make a claim requiring the corporation tax of the preceding accounting periods ending within the time specified in paragraph (b) to be reduced by the amount of the excess.<\/p>\n<p>(b)The time referred to in paragraph (a) shall be a time immediately preceding the accounting period first mentioned in that paragraph, equal in length to that accounting period, but the amount of the reduction which may be made under that paragraph in the corporation tax of an accounting period falling partly before that time shall not exceed the corporation tax referable to the part of those profits proportionate to the part of the period falling within that time.<\/p>\n<p>(4B)<\/p>\n<p>(a)Where a claim under subsection (4A)(a) has been made, and the amount of the excess referred to in subsection (4A)(a) exceeds the corporation tax of the preceding accounting periods ending within the time specified in subsection (4A)(b) or where no corporation tax arises for those preceding accounting periods, the company may make a claim to have any excess remaining paid to the company by the Revenue Commissioners.<\/p>\n<p>(b)Subject to section 766B, on receipt of a claim the Revenue Commissioners shall pay any excess remaining to the company, in 3 instalments &#8211;<\/p>\n<p>(i)the first instalment shall be paid by the Revenue Commissioners not earlier than the date provided for in paragraph (b)(i) of the definition of \u201cspecified return date for the chargeable period\u201d as defined in section 959A, for the accounting period in which the expenditure on research and development was incurred and shall equal 33 per cent of the excess remaining,<\/p>\n<p>(ii)in respect of the second instalment &#8211;<\/p>\n<p>(I)the excess remaining, as reduced by the first instalment under subparagraph (i), shall be first treated as an amount by which the corporation tax of the accounting period next succeeding the accounting period in which the expenditure giving rise to the claim under this subsection was incurred, is reduced in accordance with subsection (4), and<\/p>\n<p>(II)the second instalment shall be paid by the Revenue Commissioners not earlier than 12 months immediately following the date referred to in subparagraph (i) and shall equal 50 per cent of the amount of the excess remaining as reduced by the aggregate of the first instalment under subparagraph (i) and the amount treated as reducing the corporation tax of an accounting period under clause (I),<\/p>\n<p>and<\/p>\n<p>(iii)in respect of the last instalment &#8211;<\/p>\n<p>(I)the excess remaining, as reduced by the first and second instalments and by the amount treated as reducing the corporation tax of an accounting period under clause (I) of subparagraph (ii), shall be first treated as an amount by which the corporation tax of the accounting period next succeeding the accounting period referred to in clause (I) of subparagraph (ii) is reduced in accordance with subsection (4), and<\/p>\n<p>(II)the last instalment shall be paid by the Revenue Commissioners not earlier than 24 months immediately following the date referred to in subparagraph (i) and shall equal the amount by which the excess remaining is reduced by the first and second instalments and by the total of the amounts by which the corporation tax of an accounting period is reduced under clause (I) of subparagraph (ii) and under clause (I) of this subparagraph.<\/p>\n<p>(4C)Where, in respect of a claim made in respect of an accounting period that commenced before 1 January 2022, an amount is due to be paid as &#8211;<\/p>\n<p>(a)a second instalment under subsection (4B)(b)(ii), or<\/p>\n<p>(b)a last instalment under subsection (4B)(b)(iii),<\/p>\n<p>in an accounting period that commences on or after 1 January 2022 (in this subsection referred to as the &#8216;second-mentioned accounting period&#8217;), the company may, notwithstanding subsection (5), within 12 months of the end of the second-mentioned accounting period, make a claim in the return filed under Part 41A to have such excess paid to the company by the Revenue Commissioners, notwithstanding the restrictions set out in subparagraphs (ii)(II) and (iii)(II) of subsection (4B) in relation to the period before the expiry of which the Revenue Commissioners may not make a payment of the second or last instalment, as the case may be.<\/p>\n<p>(5)Any claim under this section shall be made within 12 months from the end of the accounting period in which the relevant expenditure, giving rise to the claim, is incurred.<\/p>\n<p>(6)<\/p>\n<p>(a)Where expenditure is incurred by a company on a building or structure and the building or structure will not be used by the company wholly and exclusively for the purposes of research and development, the proportion of the use of the building or the amount of the expenditure, attributable to research and development shall be such portion of the use of the building or the expenditure as is just and reasonable.<\/p>\n<p>(b)Where, at any time, any apportionment referred to in paragraph (a), or a further apportionment made under this paragraph, ceases to be just and reasonable, then &#8211;<\/p>\n<p>(i)such further apportionment shall be made at that time as is just and reasonable,<\/p>\n<p>(ii)any such further apportionment shall supersede any earlier apportionment, and<\/p>\n<p>(iii)any such adjustments, assessments or repayments of tax shall be made as are necessary to give effect to any apportionment under this subsection.<\/p>\n<p>(7)Any amount payable by virtue of subsection (4B) shall not be income of the company or another company, for any tax purpose.<\/p>\n<p>(8)Any amount payable by the Revenue Commissioners to the company or another company by virtue of subsection (4B) shall be deemed to be an overpayment of corporation tax, for the purposes only of section 960H(2).<\/p>\n<p>(9)<\/p>\n<p>(a)A claim shall not be made under this section in respect of relevant expenditure incurred in an accounting period that commences on or after 1 January 2023.<\/p>\n<p>(b)A company may, in respect of relevant expenditure incurred in an accounting period, make a claim under this section or section 766D.<\/p>\n<p>766B.<\/p>\n<h4>Limitation of tax credits to be paid under section 766 or 766A.<\/h4>\n<p>(1)In this section &#8216;payroll liabilities&#8217; means &#8211;<\/p>\n<p>(a)the amount of income tax which the company is required, by or under Chapter 4 of Part 42, to remit to the Collector-General for the relevant payroll period in respect of emoluments, as defined in section 983, paid to, or on account of, all employees and directors,<\/p>\n<p>(b)the amount of Pay Related Social Insurance Contributions in respect of the reckonable earnings and reckonable emoluments of all directors and employees which the company is required to remit to the Collector-General for the relevant payroll period by or under the Social Welfare Acts, and<\/p>\n<p>(c)any other amount of levies or charges the company is required, by or under Parts 18A, 18B or 18D, to remit to the Collector-General for the relevant payroll period;<\/p>\n<p>&#8216;relevant payroll period&#8217; means the period &#8211;<\/p>\n<p>(a)beginning at the time the period immediately preceding, and equal in length to, the accounting period in which the expenditure was incurred begins, and<\/p>\n<p>(b)ending at the time that accounting period ends.<\/p>\n<p>(2)For the purpose of subsection (1), Pay Related Social Insurance includes Pay Related Social Insurance Contributions payable under the Social Welfare Acts, Health Contributions payable under the Health Contributions Act 1979, and levies payable under the National Training Fund Act 2000.<\/p>\n<p>(3)Where in respect of expenditure in an accounting period a company makes a claim under section 766(4B) or 766A(4B), then the aggregate amount payable by the Revenue Commissioners to that company under those sections shall not exceed the greater of &#8211;<\/p>\n<p>(a)the aggregate of the corporation tax paid by the company in respect of accounting periods ending in the 10 years immediately preceding the time specified in subsection (4A) (b) of section 766, in relation to the accounting period in which the expenditure was incurred, as reduced by any amounts payable to the company in respect of claims made under section 766(4B) or 766A(4B), as the case may be, in respect of expenditure in a previous accounting period, or<\/p>\n<p>(b)the aggregate of the amounts payable by the company in respect of payroll liabilities for the relevant payroll period in which the expenditure was incurred as reduced by the lesser of &#8211;<\/p>\n<p>(i)the amount by which the aggregate of any amounts payable to the company in respect of claims made under section 766(4B) or 766A(4B), as the case may be, in respect of expenditure incurred in a previous accounting period, exceeds the payroll liabilities in respect of the period &#8211;<\/p>\n<p>(I)beginning at the time that the accounting period in respect of which the first such claim was made begins, and<\/p>\n<p>(II)ending at the time the accounting period immediately preceding the accounting period in which the expenditure was incurred ends,<\/p>\n<p>and<\/p>\n<p>(ii)the amount of the payroll liabilities for the period &#8211;<\/p>\n<p>(I)beginning at the time at which the relevant payroll period begins, and<\/p>\n<p>(II)ending at the time the accounting period immediately preceding the accounting period in which the expenditure was incurred ends, or<\/p>\n<p>(4)This section shall not apply in respect of a claim made under section 766(4B) or 766A(4B) in a return the specified return date (within the meaning of Part 41A) of which is on or after 23 September 2023.<\/p>\n<p>766C.<\/p>\n<h4>Research and development corporation tax credit.<\/h4>\n<p>(1)Subject to subsection (2), where in respect of any accounting period a company makes a claim in that behalf, it shall be entitled to an amount (in this section referred to as &#8216;the credit&#8217;) equal to 30 per cent of the qualifying expenditure attributable to the company as is referable to the accounting period.<\/p>\n<p>(2)<\/p>\n<p>(a)This subsection applies in respect of a company (in this subsection referred to as a &#8216;surrendering company&#8217;) that &#8211;<\/p>\n<p>(i)in respect of any accounting period claims the credit in accordance with this section, and<\/p>\n<p>(ii)specifies that the credit, or any portion of the credit, shall be treated as an overpayment of tax under subsection (7)(a),<\/p>\n<p>where the amount specified by the company under subparagraph (ii) is in excess of the company&#8217;s liabilities (within the meaning of section 960H), and the difference between that amount so specified and those liabilities shall be referred to in this subsection as &#8216;the excess&#8217;.<\/p>\n<p>(b)A surrendering company may make a claim under paragraph (c) in respect of the amount of the excess.<\/p>\n<p>(c)A surrendering company may, on making a claim in that behalf, surrender all or part of the excess, to one or such number of key employees as the surrendering company may specify but the aggregate of such amounts, attributable to such employees, may not exceed the amount so surrendered.<\/p>\n<p>(d)The part of that amount of the credit that may be surrendered by the surrendering company as referred to in paragraph (c) may not exceed the corporation tax payable by that surrendering company in respect of that accounting period.<\/p>\n<p>(e)A claim in accordance with this subsection shall be made in such form as the Revenue Commissioners may prescribe and the surrendering company shall notify the key employee, in writing, of any amount surrendered to that employee.<\/p>\n<p>(3)<\/p>\n<p>Where in respect of any accounting period a company makes a claim under subsections (1) and (2) and the amount so claimed or surrendered, or both, as the case may be, is subsequently found not to have been as is authorised by this section, then, the amount which is not so authorised shall be first attributable to a claim under subsection (1) in priority to a claim under subsection (2).<\/p>\n<p>(4)Where in respect of an accounting period, a company makes a claim under subsection (2) and it is subsequently found that the amount surrendered in accordance with that claim (hereafter in this section referred to as the &#8216;initial amount&#8217;) is not as authorised by this section, then, in relation to each key employee, the amount surrendered, which is authorised by this section, shall be an amount (hereafter in this section referred to as the &#8216;relevant authorised amount&#8217;) determined by the formula &#8211;<\/p>\n<p>where &#8211;<\/p>\n<p>&nbsp;<\/p>\n<p>A is the portion of the initial amount attributable to that key employee in accordance with the claim under subsection (2),<\/p>\n<p>B is the aggregate amount that may be surrendered by the company in respect of that accounting period as is authorised by this section, and<\/p>\n<p>C is the initial amount,<\/p>\n<p>and the company shall notify the key employee in writing of the relevant authorised amount.<\/p>\n<p>(5)For the purposes of subsection (1) &#8211;<\/p>\n<p>(a)qualifying expenditure attributable to a company in relation to a relevant period shall be so much of the amount of qualifying group expenditure on research and development in the relevant period as is attributed to the company in the manner specified in a notice made jointly in writing by the qualified companies that are members of the group, but where no such notice is given means an amount determined by the formula &#8211;<\/p>\n<p>&nbsp;<\/p>\n<p>where &#8211;<\/p>\n<p>Q is the qualifying group expenditure on research and development in the relevant period,<\/p>\n<p>C is the amount of expenditure on research and development incurred by the company in the relevant period at a time when the company is a member of the group, and<\/p>\n<p>G is the group expenditure on research and development in the relevant period,<\/p>\n<p>(b)where a relevant period coincides with an accounting period of a company, the amount of qualifying expenditure on research and development attributable to the company as is referable to the accounting period of the company shall be the full amount of that expenditure, and<\/p>\n<p>(c)where the relevant period does not coincide with an accounting period of the company &#8211;<\/p>\n<p>(i)the qualifying expenditure on research and development attributable to the company shall be apportioned to the accounting periods which fall wholly or partly in the relevant period, and<\/p>\n<p>(ii)the amount so apportioned to an accounting period shall be treated as the amount of qualifying expenditure on research and development attributable to the company as is referable to the accounting period of the company.<\/p>\n<p>(6)<\/p>\n<p>Where, in an accounting period, a company makes a claim in respect of the credit under subsection (1), the amount so claimed shall be payable in 3 annual instalments as follows:<\/p>\n<p>(a)the first instalment shall equal &#8211;<\/p>\n<p>(i)\u20ac50,000, or if lower, the amount of the credit claimed, or<\/p>\n<p>(ii)50 per cent of the amount of the credit claimed,<\/p>\n<p>whichever is the greater;<\/p>\n<p>(b)the second instalment, if any, shall be an amount determined by the formula &#8211;<\/p>\n<p>&nbsp;<\/p>\n<p>where &#8211;<\/p>\n<p>A is the amount of the credit claimed, and<\/p>\n<p>B is the amount of the first instalment under paragraph (a);<\/p>\n<p>(c)the third instalment, if any, shall be an amount determined by the formula &#8211;<\/p>\n<p>&nbsp;<\/p>\n<p>where &#8211;<\/p>\n<p>A is the amount of the credit claimed,<\/p>\n<p>B is the amount of the first instalment under paragraph (a), and<\/p>\n<p>C is the amount of the second instalment under paragraph (b).<\/p>\n<p>(7)<\/p>\n<p>The company shall specify in respect of each instalment referred to in subsection (6) whether such amounts, or any portion of such amounts, are to be &#8211;<\/p>\n<p>(a)treated as an overpayment of tax, for the purposes of section 960H, or<\/p>\n<p>(b)paid to the company by the Revenue Commissioners.<\/p>\n<p>(7A)Where a company (in this section and section 766D referred to as the \u2018predecessor\u2019) which has made a claim in accordance with this section ceases to carry on a trade which includes the carrying on by it of research and development activities and another company (in this section and section 766D referred to as the \u2018successor\u2019) commences to carry on the trade and those research and development activities (the cessation and commencement referred to in this section and section 766D as the \u2018event\u2019) and &#8211;<\/p>\n<p>(a)both the predecessor and successor were, at the time of the event, members of the same group of companies within the meaning of section 411(1), and<\/p>\n<p>(b)on or at any time within 2 years after the event the trade and the research and development activities are not carried on otherwise than by the successor,<\/p>\n<p>then the successor may, to the extent that the predecessor has not, in respect of each instalment referred to in subsection (6), specified that the amount of the instalment, or any portion of that amount, is to be treated as an overpayment of tax in accordance with subsection (7)(a) or paid to the company in accordance with subsection (7)(b), be entitled to such amount that the predecessor would have been entitled to under subsections (1) and (6).<\/p>\n<p>(8)The credit, if any, arising to a company in accordance with this section shall not be income of the company or another company for the purposes of corporation tax.<\/p>\n<p>(9)<\/p>\n<p>(a)Any claim under this section shall be made within 12 months from the end of the accounting period in which the expenditure, giving rise to the claim, is incurred and shall be made in the return that the company is required to file, under Part 41A, in respect of that accounting period.<\/p>\n<p>(b)The company shall, when making a claim in accordance with paragraph (a), provide details of &#8211;<\/p>\n<p>(i)the amount of the expenditure attributable to research and development activities incurred by the company during the accounting period concerned in respect of &#8211;<\/p>\n<p>(I)machinery or plant as referred to in section 766(1A)(a), and<\/p>\n<p>(II)emoluments of the employees carrying on qualifying research and development activities,<\/p>\n<p>(ii)the sum of the remaining qualifying expenditure incurred by the company during the accounting period concerned, and<\/p>\n<p>(iii)amounts claimed under section 766(2), which are carried forward by the company in accordance with section 766(4) (referred to in section 766(4) as \u2018the excess\u2019), excluding amounts claimed in accordance with section 766(4B), and which may be treated as an amount by which corporation tax of the succeeding accounting periods may be reduced.<\/p>\n<p>(c)In this subsection, &#8217;emoluments&#8217; and &#8217;employees&#8217; have the meanings given to them by section 983.<\/p>\n<p>(10)<\/p>\n<p>(a)Any claim in respect of the credit under subsection (1) (whether the amount of the credit is to be treated as an overpayment of tax under subsection (7)(a) or paid to the company under subsection (7)(b)) shall, for the purposes of 851A and 851B, Chapter 4 of Part 38 and Part 47, be treated as a claim for a credit and the amount so claimed shall be treated as an amount of tax refundable.<\/p>\n<p>(b)In respect of any claim in respect of the credit that remains unpaid, for the purposes of determining an amount in accordance with subsections (3) or (4) of section 1077F, a reference to an amount of tax that would have been payable for the relevant period by the person concerned shall be read as if it were a reference to the amount so claimed.<\/p>\n<p>(c)<\/p>\n<p>(i)Subject to subparagraph (ii), where a company makes a claim in respect of the credit and it is subsequently found that the claim is not as authorised by this section then the company may be charged to tax under Case IV of Schedule D for the accounting period in respect of which the payment was made or the amount surrendered, as the case may be, in an amount equal to 4 times so much of the amount of the credit as is not so authorised.<\/p>\n<p>(ii)An amount chargeable to tax under this paragraph shall be treated &#8211;<\/p>\n<p>(I)as income against which no loss, deficit, expense or allowance may be set off, and<\/p>\n<p>(II)as not forming part of the income of the company for the purposes of calculating a surcharge under section 440.<\/p>\n<p>(d)Where in accordance with paragraph (c) an assessment is made the amount so charged shall, for the purposes of section 1080, be deemed to be tax due and payable and shall carry interest as determined in accordance with subsection (2)(c) of section 1080 as if a reference to the date when the tax became due and payable were a reference to the date the amount was paid or offset, under section 960H, by the Revenue Commissioners.<\/p>\n<p>(11)Where a claim in respect of the credit under this section is made the amount of the credit shall be paid or offset in full, in the manner specified by the company under subsection (7), by the Revenue Commissioners within 48 months from when a valid claim is made and where a valid claim has been made &#8211;<\/p>\n<p>(a)the first instalment shall be payable on the making of the return referred to in subsection (9),<\/p>\n<p>(b)the second instalment shall be payable &#8211;<\/p>\n<p>(i)where the accounting period (in this subsection referred to as the &#8216;first-mentioned accounting period&#8217;) immediately succeeding the accounting period in respect in which the claim was made is for a period of 12 months, on the filing of the return that the company is required to file under Part 41A for the first-mentioned accounting period, or<\/p>\n<p>(ii)in all other cases, 12 months after the specified return date, within the meaning of Part 41A, for the return referred to in subsection (9),<\/p>\n<p>and<\/p>\n<p>(c)the third instalment shall be payable &#8211;<\/p>\n<p>(i)where the accounting period (in this subsection referred to as the &#8216;second-mentioned accounting period&#8217;) immediately succeeding the first-mentioned accounting period is for a period of 12 months, on the filing of the return that the company is required to file under Part 41A for the second-mentioned accounting period, or<\/p>\n<p>(ii)in all other cases, 24 months after the specified return date, within the meaning of Part 41A, for the return referred to in subsection (9).<\/p>\n<p>(12)No amount of the credit shall be paid or offset under subsection (11) unless a valid claim has been made to the Revenue Commissioners for that purpose.<\/p>\n<p>(13)Where a company specifies that the first instalment, under subsection (6)(a), is to be treated, under subsection (7)(a), as an overpayment of tax, and where that amount is, under section 960H, offset in whole or in part against the company&#8217;s corporation tax payable (within the meaning of Part 41A) for the accounting period, then, for the purposesof calculating the amount of preliminary tax due in respect of that accounting period and the subsequent accounting period under section 959AR or 959AS, as the case may be, the amount of corporation tax payable by the company for that accounting period shall be reduced by the amount so offset.<\/p>\n<p>(14)In this section, &#8216;valid claim&#8217; means a claim in relation to the credit which is made under and in accordance with this section and in respect of which all information which the Revenue Commissioners may reasonably require to enable them determine if, and to what extent, the credit is due to a company in respect of an accounting period, has been furnished by that company.<\/p>\n<p>(15)In this section, a reference to an amount payable, in so far as the reference is in respect of the credit, shall be construed as a reference to an amount to be offset under section 960H pursuant to subsection (7)(a) or to be paid under subsection (7)(b), as the case may be.<\/p>\n<p>(16)Nothing in this section shall prevent the Revenue Commissioners from examining a claim subsequent to any payment or offset having been made and making or amending an assessment, as the case may be, under Chapter 5 of Part 41A.<\/p>\n<p>(17)<\/p>\n<p>(a)The company shall notify the Revenue Commissioners in writing, on or before the relevant date, in a form prescribed by the Revenue Commissioners, of the intention of the company to make a claim under this section and the prescribed form shall contain such particulars in relation to the claim as may be specified in the prescribed form including &#8211;<\/p>\n<p>(i)the name, address and corporation tax number of the company,<\/p>\n<p>(ii)a description of the research and development activities carried out by the company,<\/p>\n<p>(iii)the number of employees carrying on research and development activities, and<\/p>\n<p>(iv)details of expenditure incurred by the company on research and development activities which has been or is to be met directly or indirectly by grant assistance or any other assistance referred to in section 766(1)(b)(v).<\/p>\n<p>(b)The Revenue Commissioners may require the company to provide such additional information, explanations, and particulars and to give all assistance which may reasonably be required for the purpose of inspecting the information required to be delivered under this subsection.<\/p>\n<p>(c)Paragraph (a) shall not apply where the company has made a claim under this section or section 766 in respect of any of the 3 immediately preceding accounting periods.<\/p>\n<p>(d)In paragraph (a), \u2018relevant date\u2019 means the date which is 90 days before the claim under subsection (1) shall be made.<\/p>\n<p>766D.<\/p>\n<h4>Research and development corporation tax credit: expenditure on buildings or structures.<\/h4>\n<p>(1)Where in an accounting period a qualified company incurs relevant expenditure and the company makes a claim on that behalf it shall be entitled to an amount (in this section referred to as &#8216;the credit&#8217;) equal to 30 per cent of the specified relevant expenditure.<\/p>\n<p>(2)<\/p>\n<p>(a)This subsection applies in respect of a qualified company (in this subsection referred to as a &#8216;surrendering company&#8217;) that &#8211;<\/p>\n<p>(i)in respect of any accounting period claims the credit in accordance with this section,<\/p>\n<p>(ii)specifies that the credit, or any portion of that credit, shall be treated as an overpayment of tax under subsection (6)(a), and<\/p>\n<p>(iii)is a member of a group of companies,<\/p>\n<p>where the amount specified under subparagraph (ii) is in excess of that company&#8217;s liabilities (within the meaning of section 960H), and the difference between that amount so specified and those liabilities shall be referred to in this subsection as &#8216;the excess&#8217;.<\/p>\n<p>(b)A surrendering company may make a claim under paragraph (c) in respect of the amount of the excess.<\/p>\n<p>(c)A surrendering company may, on making a claim in that behalf, specify that all or part of the excess is to be treated as an amount of an overpayment (within the meaning of section 960H) by another company which is a member of that group for that other company&#8217;s corresponding accounting period.<\/p>\n<p>(d)A claim under paragraph (c) shall be made in such form as the Revenue Commissioners may prescribe.<\/p>\n<p>(3)Where &#8211;<\/p>\n<p>(a)in an accounting period a company incurs relevant expenditure on a building or structure,<\/p>\n<p>(b)in relation to that expenditure the credit has been claimed under this section, and<\/p>\n<p>(c)at any time in the period of 10 years commencing at the beginning of the accounting period referred to in paragraph (a) the building or structure is sold or ceases to be used by the company for the purpose of research and development activities or for the purpose of the same trade that was carried on by the company at the beginning of the specified relevant period, in connection with which the research and development activities were carried on,<\/p>\n<p>then the company shall be charged to tax under Case IV of Schedule D for the accounting period in which the building or structure is sold or ceases to be used for the purpose of research and development activities or for the purpose of the trade, in an amount equal to 4 times the amount claimed.<\/p>\n<p>(3A)Where an event referred to in section 766C(7A) occurs and &#8211;<\/p>\n<p>(a)in connection with the event the predecessor transfers to the successor a building or structure in respect of which &#8211;<\/p>\n<p>(i)the predecessor had made a claim under this section,<\/p>\n<p>(ii)the transfer is a transfer to which section 617 applies, and<\/p>\n<p>(iii)at the time of the transfer either or both the specified relevant period and the specified time had not expired,<\/p>\n<p>(b)on, or at any time within 2 years after, the event, the trade and research and development activities are not carried on otherwise than by the successor, and<\/p>\n<p>(c)the building or structure in respect of which relevant expenditure was incurred by the predecessor &#8211;<\/p>\n<p>(i)in a case where the specified relevant period had not expired, would continue to be a qualifying building if a reference, in the definition of \u2018qualifying building\u2019 in section 766A(1)(a), to activities carried on by the company were construed as a reference to activities carried on by the company and the successor, and<\/p>\n<p>(ii)continues to be used by the successor throughout the remainder of the specified time for the purposes of research and development activities,<\/p>\n<p>then &#8211;<\/p>\n<p>(I)the charge to tax as provided for in subsection (3) shall not apply in relation to the transfer by the predecessor,<\/p>\n<p>(II)the successor may, to the extent that the predecessor has not, in respect of each instalment referred to in subsection (5), specified that the amount of the instalment, or any portion of that amount, is to be treated as an overpayment of tax in accordance with subsection (6)(a) or paid to the company in accordance with subsection (6)(b), be entitled to such amount that the predecessor would have been entitled to under subsections (1) and (5), and<\/p>\n<p>(III)subsection (3) shall have effect as if references to the company in that subsection were references to the successor.<\/p>\n<p>(4)<\/p>\n<p>(a)Where expenditure is incurred by a company on a building or structure and the building or structure will not be used by the company wholly and exclusively for the purposes of research and development, the proportion of the use of the building or the amount of the expenditure attributable to research and development shall be such portion of the use of the building or the expenditure as is just and reasonable.<\/p>\n<p>(b)Where, at any time, any apportionment referred to in paragraph (a), or a further apportionment made under this paragraph, ceases to be just and reasonable, then &#8211;<\/p>\n<p>(i)such further apportionment shall be made at that time as is just and reasonable,<\/p>\n<p>(ii)any such further apportionment shall supersede any earlier apportionment, and<\/p>\n<p>(iii)any such adjustments, assessments or repayments of tax shall be made as are necessary to give effect to any apportionment under this subsection.<\/p>\n<p>(5)Where, in an accounting period, a company makes a claim in respect of the credit under subsection (1) the amount so claimed shall be payable in 3 annual instalments as follows:<\/p>\n<p>(a)the first instalment shall equal 50 per cent of the amount of the credit claimed;<\/p>\n<p>(b)the second instalment, if any, shall be an amount determined by the formula &#8211;<\/p>\n<p>&nbsp;<\/p>\n<p>where &#8211;<\/p>\n<p>A is the amount of the credit claimed, and<\/p>\n<p>B is the amount of the first instalment under paragraph (a);<\/p>\n<p>(c)the third instalment, if any, shall be an amount determined by the formula &#8211;<\/p>\n<p>&nbsp;<\/p>\n<p>where &#8211;<\/p>\n<p>A is the amount of the credit claimed,<\/p>\n<p>B is the amount of the first instalment under paragraph (a), and<\/p>\n<p>C is the amount of the second instalment under paragraph (b).<\/p>\n<p>(6)The company shall specify in respect of each instalment referred to in subsection (5) whether such amounts, or any portion of such amounts, are to be &#8211;<\/p>\n<p>(a)treated as an overpayment of tax, for the purposes of section 960H, or<\/p>\n<p>(b)paid to the company by the Revenue Commissioners.<\/p>\n<p>(7)The credit, if any, arising to a company in accordance with this section shall not be income of the company or another company for the purposes of corporation tax.<\/p>\n<p>(8)Any claim under this section shall be made within 12 months from the end of the accounting period in which the expenditure, giving rise to the claim, is incurred and shall be made in the return that the company is required to file, under Part 41A, in respect of that accounting period.<\/p>\n<p>(8A)The company shall, when making a claim in accordance with subsection (8), provide details of amounts which are carried forward by the company in accordance with section 766A(4), being amounts which have not been used to reduce the corporation tax of an accounting period in accordance with section 766A(2) (referred to in section 766A(4) as \u2018the excess\u2019), excluding amounts claimed in accordance with section 766A(4B), and which may be treated as an amount by which corporation tax of the succeeding accounting period may be reduced.<\/p>\n<p>(9)<\/p>\n<p>(a)Any claim in respect of the credit under subsection (1) (whether the amount of the credit is to be treated as an overpayment of tax under subsection (6)(a) or paid to the company under subsection (6)(b)) shall, for the purposes of sections 851A and 851B, Chapter 4 of Part 38 and Part 47, be treated as a claim for a credit and the amount so claimed shall be treated as an amount of tax refundable.<\/p>\n<p>(b)In respect of a claim in respect of the credit that remains unpaid, for the purposes of determining an amount in accordance with subsections (3) or (4) of section 1077F, a reference to an amount of tax that would have been payable for the relevant period by the person concerned shall be read as if it were a reference to the amount so claimed.<\/p>\n<p>(c)<\/p>\n<p>(i)Subject to subparagraph (ii), where a company makes a claim in respect of the credit and it is subsequently found that the claim is not as authorised by this section then the company may be charged to tax under Case IV of Schedule D for the accounting period in respect of which the payment was made or the amount surrendered, as the case may be, in an amount equal to 4 times so much of the amount of the credit as is not so authorised.<\/p>\n<p>(ii)An amount chargeable to tax under this paragraph shall be treated &#8211;<\/p>\n<p>(I)as income against which no loss, deficit, expense or allowance may be set off, and<\/p>\n<p>(II)as not forming part of the income of the company for the purposes of calculating a surcharge under section 440.<\/p>\n<p>(d)Where in accordance with paragraph (c) an assessment is made the amount so charged shall, for the purposes of section 1080, be deemed to be tax due and payable and shall carry interest as determined in accordance with subsection (2)(c) of section 1080 as if a reference to the date when the tax became due and payable were a reference to the date the amount was paid or offset, under section 960H, by the Revenue Commissioners.<\/p>\n<p>(10)Where a claim in respect of the credit under this section is made the amount of the credit shall be paid or offset in full, in the manner specified by the company under subsection (6), by the Revenue Commissioners within 48 months from when a valid claim is made and where a valid claim has been made &#8211;<\/p>\n<p>(a)the first instalment shall be payable on the making of the return referred to in subsection (8),<\/p>\n<p>(b)the second instalment shall be payable &#8211;<\/p>\n<p>(i)where the accounting period (in this subsection referred to as the &#8216;first-mentioned accounting period&#8217;) immediately succeeding the accounting period respect of in which the claim was made is for a period of 12 months, on the filing of the return that the company is required to file under Part 41A for the first-mentioned accounting period, or<\/p>\n<p>(ii)in all other cases, 12 months after the specified return date, within the meaning of Part 41A, for the return referred to in subsection (8),<\/p>\n<p>and<\/p>\n<p>(c)the third instalment shall be payable &#8211;<\/p>\n<p>(i)where the accounting period (in this subsection referred to as the &#8216;second-mentioned accounting period&#8217;) immediately succeeding the first-mentioned accounting period is for a period of 12 months, on the filing of the return that the company is required to file under Part 41A for the second-mentioned accounting period, or<\/p>\n<p>(ii)in all other cases, 24 months after the specified return date, within the meaning of Part 41A, for the return referred to in subsection (8).<\/p>\n<p>(11)No amount of the credit shall be paid or offset under subsection (10) unless a valid claim has been made to the Revenue Commissioners for that purpose.<\/p>\n<p>(12)Where a company specifies that the first instalment, under subsection (5)(a), is to be treated, under subsection (6)(a), as an overpayment of tax, and where that amount is, under section 960H, offset in whole or in part against the company&#8217;s corporation tax payable (within the meaning of Part 41A) for the accounting period, then, for the purposes of calculating the amount of preliminary tax due in respect of that accounting period and the subsequent accounting period under section 959AR or 959AS, as the case may be, the amount of corporation tax payable by the company for that accounting period shall be reduced by the amount so offset.<\/p>\n<p>(13)In this section, &#8216;valid claim&#8217; means a claim in relation to the credit which is made under and in accordance with this section and in respect of which all information which the Revenue Commissioners may reasonably require to enable them determine if, and to what extent, the credit is due to a company in respect of an accounting period, has been furnished by that company.<\/p>\n<p>(14)In this section, a reference to an amount payable, in so far as the reference is in respect of the credit, shall be construed as a reference to any amount to be offset under section 960H pursuant to subsection (6)(a) or to be paid under subsection (6)(b), as the case may be.<\/p>\n<p>(15)Nothing in this section shall prevent the Revenue Commissioners from examining a claim subsequent to any payment or offset having been made and making or amending an assessment, as the case may be, under Chapter 5 of Part 41A.<\/p>\n<p>(16)<\/p>\n<p>(a)The company shall notify the Revenue Commissioners in writing, on or before the relevant date, in a form prescribed by the Revenue Commissioners, of the intention of the company to make a claim under this section and the prescribed form shall contain such particulars in relation to the claim as may be specified in the prescribed form including &#8211;<\/p>\n<p>(i)the name, address and corporation tax number of the company,<\/p>\n<p>(ii)confirmation that the building or structure is a qualifying building,<\/p>\n<p>(iii)the proportion of the qualifying building which is to be used for the purpose of the carrying on by the company of research and development activities within the meaning of section 766(1)(a) for the specified relevant period, and<\/p>\n<p>(iv)details of expenditure incurred by the company which has been or is to be met directly or indirectly by grant assistance or any other assistance referred to in section 766A(1)(b)(i).<\/p>\n<p>(b)The Revenue Commissioners may require the company to provide such additional information, explanations, and particulars and to give all assistance which may reasonably be required for the purpose of inspecting the information required to be delivered under this subsection.<\/p>\n<p>(c)Paragraph (a) shall not apply where the company has made a claim under this section or section 766A in respect of any of the 3 immediately preceding accounting periods.<\/p>\n<p>(d)In paragraph (a), \u2018relevant date\u2019 means the date which is 90 days before the claim under subsection (1) shall be made.<\/p>\n<p>767. Payment to universities and other approved bodies for research in, or teaching of, approved subjects.<br \/>\nRepealed from 6 April 2001<br \/>\n(1)In this section &#8211;<\/p>\n<p>&#8220;approved body&#8221; means &#8211;<\/p>\n<p>(a)the National College of Ireland,<\/p>\n<p>(b)an institution comprising the Dublin Institute of Technology established by or under section 3 of the Dublin Institute of Technology Act, 1992, or<\/p>\n<p>(c)an educational institution established by or under section 3 of the Regional Technical Colleges Act, 1992, as a regional technical college;<\/p>\n<p>&#8220;approved subject&#8221; means &#8211;<\/p>\n<p>(a)industrial relations,<\/p>\n<p>(b)marketing, or<\/p>\n<p>(c)any other subject which is approved for the purposes of this section by the Minister for Finance.<\/p>\n<p>(2)Where a person carrying on a trade or profession &#8211;<\/p>\n<p>(a)pays any sum to &#8211;<\/p>\n<p>(i)an Irish university, or<\/p>\n<p>(ii)an approved body,<\/p>\n<p>for the purpose of enabling the university or the approved body to undertake research in, or engage in the teaching of, an approved subject, and<\/p>\n<p>(b)the sum so paid is not income to which section 792 applies,<\/p>\n<p>the sum so paid shall, if not otherwise so deductible, be deducted as an expense in computing the profits or gains of the person&#8217;s trade or profession.<\/p>\n<p>(3)<\/p>\n<p>(a)Subsection (2) shall also apply to any sum paid to a body of persons or a trust established in the State for the sole purpose of granting financial or other aid to &#8211;<\/p>\n<p>(i)an Irish university, or<\/p>\n<p>(ii)an approved body,<\/p>\n<p>for the purpose of enabling the university or the approved body to undertake research in, or engage in the teaching of, an approved subject.<\/p>\n<p>(b)This subsection shall apply and have effect as respects a chargeable period (within the meaning of section 321) being &#8211;<\/p>\n<p>(i)where the chargeable period is a year of assessment, the year 2000-2001, and any subsequent year of assessment, or<\/p>\n<p>(ii)where the chargeable period is an accounting period of a company, an accounting period ending on or after 6 April 2001.<\/p>\n<p>Chapter 3<\/p>\n<h4>Know-how and certain training (ss. 768-769)<\/h4>\n<p>768.<\/p>\n<h4>Allowance for know-how.<\/h4>\n<p>(1)In this section &#8211;<\/p>\n<p>&#8220;control&#8221; has the same meaning as in section 312;<\/p>\n<p>&#8220;know-how&#8221; means industrial information and techniques likely to assist in the manufacture or processing of goods or materials, or in the carrying out of any agricultural, forestry, fishing, mining or other extractive operations;<\/p>\n<p>references to a body of persons include references to a partnership.<\/p>\n<p>(2)<\/p>\n<p>(a)For the purposes of this subsection, a person incurring expenditure on know-how before the setting up and commencement of the trade in which it is used shall be treated as incurring it on that setting up and commencement.<\/p>\n<p>(b)Where a person incurs expenditure on know-how for use in a trade carried on by the person or, having incurred expenditure on know-how, sets up and commences a trade in which it is used, there shall, subject to this section, be allowed to be deducted as expenses, in computing for the purposes of Case I of Schedule D the profits or gains of the trade, such part of the expenditure as would but for this section not be allowed to be so deducted.<\/p>\n<p>(3)<\/p>\n<p>(a)Where a person acquires a trade or part of a trade and, together with the trade or the part of the trade, know-how used in the trade or part of the trade, then no amount shall be allowed to be deducted under this section in respect of expenditure incurred on the acquisition of the know-how.<\/p>\n<p>(b)Subject to paragraph (c), where &#8211;<\/p>\n<p>(i)a person acquires a trade or part of a trade, and<\/p>\n<p>(ii)a person connected (within the meaning of section 10) with the person acquires know-how used in the trade or the part of the trade,<\/p>\n<p>then &#8211;<\/p>\n<p>(I)the amount of expenditure incurred on the know-how by the person referred to in subparagraph (ii) shall be allowed as a deduction against profits of the trade, carried on by that person, in which the know-how is used (in this subsection referred to as a &#8216;relevant trade&#8217;) but not against any other income or profits of whatever description,<\/p>\n<p>(II)no amount of any royalty or other sum paid by the person referred to in subparagraph (i), or by any person connected (within the meaning of section 10) with that person, for the know-how acquired by the person referred to in subparagraph (ii) shall be allowed to be deducted in computing the profits of any description, or to be treated as a charge on income, of the person making such payment, and<\/p>\n<p>(III)no amount shall be allowed to be deducted under this section where, at any time, the trade or part of the trade referred to in subparagraph (i) is transferred to the person referred to in subparagraph (ii).<\/p>\n<p>(c)Where as respects any chargeable period of a person carrying on a relevant trade, the amount by which a deduction available to be made under paragraph (b)(I) exceeds the profits of the relevant trade but for that deduction, the excess shall be carried forward and treated as an amount deductible under paragraph (b)(I) for succeeding chargeable periods and (so long as the person continues to carry on the trade) its profits from the trade in any succeeding chargeable period shall then be treated as reduced by the amount of the excess, or by so much of that excess as cannot be relieved against profits of the trade of an earlier chargeable period.<\/p>\n<p>(3A)The amount which shall be allowed to be deducted under this section in respect of expenditure incurred by a person on know-how shall be limited to the amount which has been incurred wholly and exclusively on the acquisition of know-how for bona fide commercial reasons and was not incurred as part of a scheme or arrangement the main purpose or one of the main purposes of which is the avoidance of tax.<\/p>\n<p>(4)Subsection (2) shall not apply on any sale of know-how where the buyer is a body of persons over whom the seller has control, or the seller is a body of persons over whom the buyer has control, or both the seller and the buyer are bodies of persons and some other person has control over both of them.<\/p>\n<p>(5)<\/p>\n<p>(a)The Revenue Commissioners may, in relation to a claim by a person that expenditure is allowed to be deducted in accordance with subsection (2) &#8211;<\/p>\n<p>(i)consult with any person (in this subsection referred to as an &#8216;expert&#8217;) who in their opinion may be of assistance in ascertaining the extent to which such expenditure is incurred on know-how, and<\/p>\n<p>(ii)notwithstanding any obligation as to secrecy or other restriction on the disclosure of information imposed by, or under, the Tax Acts or any other statute or otherwise, but subject to paragraph (b), disclose any detail in the person&#8217;s claim under this section which they consider necessary for such consultation.<\/p>\n<p>(b)Before disclosing information to any expert under paragraph (a), the Revenue Commissioners shall give notice in writing to the person of &#8211;<\/p>\n<p>(i)their intention to disclose information to the expert,<\/p>\n<p>(ii)the information that they intend to disclose, and<\/p>\n<p>(iii)the identity of the expert whom they intend to consult,<\/p>\n<p>and shall give the person a period of 30 days after the date of the notice to show to their satisfaction that disclosure of such information to that expert could prejudice the person&#8217;s trade.<\/p>\n<p>(c)Where, on the expiry of the period referred to in paragraph (b), it is not shown to the satisfaction of the Revenue Commissioners that disclosure of such information to that expert could prejudice the person&#8217;s trade, they may disclose the information where they &#8211;<\/p>\n<p>(i)give the person notice in writing of their decision to so disclose, and<\/p>\n<p>(ii)allow that person a period of 30 days after the date of the notice to appeal their decision to the Appeal Commissioners before disclosing the information.<\/p>\n<p>(d)A person aggrieved by a decision made under paragraph (c) in respect of that person may appeal the decision to the Appeal Commissioners, in accordance with section 949I, within the period of 30 days after the date of the notice of that decision.<\/p>\n<p>(6)Where any relief has been claimed under this section which is subsequently found not to have been due, that relief shall be withdrawn by making an assessment to tax, under Case IV of Schedule D, for the chargeable period or chargeable periods in which relief was claimed and, notwithstanding anything in the Tax Acts, such an assessment may be made at any time.<\/p>\n<p>(7)Subject to subsection (8), this section shall not apply to a company within the charge to corporation tax.<\/p>\n<p>(8)<\/p>\n<p>(a)Subject to paragraph (b), where a company elects in writing, this section shall apply to expenditure, specified in the election, incurred by it on know-how after 7 May 2009 and before 7 May 2011.<\/p>\n<p>(b)An election under paragraph (a) shall be made in the return required to be made under section 951 for the accounting period of the company in which the expenditure is incurred and shall not be made later than 12 months from the end of the accounting period in which the capital expenditure, giving rise to the claim, is incurred.<\/p>\n<p>769.<\/p>\n<h4>Relief for training of local staff before commencement of trading.<\/h4>\n<p>(1)Where, before the day of the setting up or commencement of a trade consisting of the production for sale of manufactured goods, a person who is about to carry on the trade incurs or has incurred expenditure on the recruitment and training, with a view to their employment in the trade, of persons all or a majority of whom are Irish citizens, there shall be made to such person allowances in respect of that expenditure during a writing-down period of 3 years beginning on that day, and such allowances shall be made in taxing the trade.<\/p>\n<p>(2)For the purposes of this section &#8211;<\/p>\n<p>(a)expenditure shall not include any expenditure incurred by a person in respect of which no deduction would have been allowable to the person, in computing the profits or gains of the trade under the provisions of the Tax Acts applicable to Case I of Schedule D, if it had been incurred on or after the day of the setting up or commencement of the trade;<\/p>\n<p>(b)expenditure shall not be regarded as having been incurred by a person in so far as it has been or is to be met directly or indirectly by the State or by any person other than the first-mentioned person;<\/p>\n<p>(c)the date on which any expenditure is incurred shall be taken to be the date on which the sum in question becomes payable.<\/p>\n<p>(3)Section 304 (4) shall apply in relation to an allowance under subsection (1) as it applies in relation to an allowance to be made under Part 9.<\/p>\n<p>(4)For the purposes of the Income Tax Acts, any claim by a person for an allowance under this section shall be included in the annual statement required to be delivered under those Acts of the profits or gains of the person&#8217;s trade and shall be accompanied by a certificate signed by the claimant (which shall be deemed to form part of the claim) stating that the expenditure was incurred on the recruitment and training, with a view to their employment in the trade, of persons all or a majority of whom are Irish citizens and giving such particulars as show that the allowance is to be made.<\/p>\n<p>Chapter 4<\/p>\n<h4>Transmission Capacity Rights (ss. 769A-769F)<\/h4>\n<p>769A.<\/p>\n<h4>Interpretation (Chapter 4).<\/h4>\n<p>(1)In this Chapter &#8211;<\/p>\n<p>&#8220;capacity rights&#8221; means the right to use wired, radio or optical transmission paths for the transfer of voice, data or information<\/p>\n<p>&#8220;control&#8221; shall be construed in accordance with section 432<\/p>\n<p>&#8220;qualifying expenditure&#8221; means capital expenditure incurred on the purchase of capacity rights, but does not include expenditure incurred on or after 6 February 2003 which consists of a licence fee or other payment paid to the Commission for Communications Regulation in respect of a licence or permission granted by that Commission on or after that date under &#8211;<br \/>\n(a)the Wireless Telegraphy Acts 1926 to 1988, or<br \/>\n(b)the Postal and Telecommunications Services Act 1983<\/p>\n<p>&#8220;writing-down period&#8221; has the meaning assigned to it by section 769B(2)<\/p>\n<p>(2)In this Chapter, any reference to the sale of part of capacity rights includes a reference to the grant of a licence in respect of the capacity rights in question, and any reference to the purchase of capacity rights includes a reference to the acquisition of a licence in respect of capacity rights; but, if a licence granted by a company entitled to any capacity rights is a licence to exercise those rights to the exclusion of the grantor and all other persons for the whole of the remainder of the term for which the rights subsist, the grantor shall be treated for the purposes of this Chapter as thereby selling the whole of the rights.<\/p>\n<p>769B.<\/p>\n<h4>Annual allowances for capital expenditure on purchase of capacity rights.<\/h4>\n<p>(1)Where, on or after 1 April 2000, a company incurs qualifying expenditure on the purchase of capacity rights, there shall, subject to and in accordance with this Chapter, be made to that company writing-down allowances, in respect of that expenditure during the writing-down period; but no writing-down allowance shall be made to a company in respect of any expenditure unless &#8211;<\/p>\n<p>(a)the allowance is to be made to the company in taxing the company&#8217;s trade, or<\/p>\n<p>(b)any income receivable by the company in respect of the rights would be liable to tax.<\/p>\n<p>(2)<\/p>\n<p>(a)Subject to paragraph (c), the writing-down period shall be &#8211;<\/p>\n<p>(i)a period of 7 years, or<\/p>\n<p>(ii)where the capacity rights are purchased for a specified period which exceeds 7 years, the number of years for which the capacity rights are purchased,<\/p>\n<p>commencing with the beginning of the accounting period related to the expenditure.<\/p>\n<p>(b)For the purposes of this section, writing-down allowances shall be determined by the formula &#8211;<\/p>\n<p>where &#8211;<\/p>\n<p>Ais the amount of the qualifying expenditure incurred on the purchase of the capacity rights,<\/p>\n<p>Bis the length of the part of the chargeable period falling within the writing-down period, and<\/p>\n<p>Cis the length of the writing-down period.<\/p>\n<p>(c)For the purposes of this subsection, any expenditure incurred for the purposes of a trade by a company about to carry on the trade shall be treated as if that expenditure had been incurred by that company on the first day on which that company carries on the trade unless before that day the company has sold all the capacity rights on the purchase of which the expenditure was incurred.<\/p>\n<p>(3)<\/p>\n<p>(a)Notwithstanding any other provisions of this Chapter, where a company (in this paragraph referred to as the &#8216;buyer&#8217;) incurs qualifying expenditure on the purchase from another company (in this paragraph referred to as the &#8216;seller&#8217;) of capacity rights, no allowances shall be made under this Chapter to the buyer in respect of that expenditure if both companies are companies within a group of companies, unless an allowance had been made under this Chapter to the seller (or would have been made to the seller if it had not sold those rights) in respect of the capital expenditure it incurred on the purchase of those rights.<\/p>\n<p>(b)For the purposes of this subsection &#8211;<\/p>\n<p>(i)a &#8216;group of companies&#8217; means a company and any other companies of which it has control or with which it is associated, and<\/p>\n<p>(ii)a company is associated with another company where it could reasonably be considered that &#8211;<\/p>\n<p>(I)any person or any group of persons or groups of persons having a reasonable commonality of identity has or have, as the case may be, or had the means or power, either directly or indirectly, to determine the trading operations carried on or to be carried on by both companies, or<\/p>\n<p>(II)both companies are under the control of any person or any group of persons or groups of persons having a reasonable commonality of identity.<\/p>\n<p>769C.<\/p>\n<h4>Effect of lapse of capacity rights.<\/h4>\n<p>(1)Where a company incurs qualifying expenditure on the purchase of capacity rights and, before the end of the writing-down period, any of the following events occurs &#8211;<\/p>\n<p>(a)the rights come to an end without provision for their subsequent renewal or the rights cease altogether to be exercised;<\/p>\n<p>(b)the company sells all those rights or so much of them as it still owns;<\/p>\n<p>(c)the company sells part of those rights and the amount of net proceeds of the sale (in so far as they consist of capital sums) are not less than the amount of the qualifying expenditure remaining unallowed;<\/p>\n<p>no writing-down allowance shall be made to that company for the chargeable period related to the event or for any subsequent chargeable period.<\/p>\n<p>(2)Where a company incurs qualifying expenditure on the purchase of capacity rights and, before the end of the writing-down period, either of the following events occurs &#8211;<\/p>\n<p>(a)the rights come to an end without provision for their subsequent renewal or the rights cease altogether to be exercised;<\/p>\n<p>(b)the company sells all those rights or so much of them as it still owns, and the amount of the net proceeds of the sale (in so far as they consist of capital sums) are less than the amount of the qualifying expenditure remaining unallowed;<\/p>\n<p>there shall, subject to and in accordance with this Chapter, be made to that company for the accounting period related to the event an allowance (in this Chapter referred to as a &#8216;balancing allowance&#8217;) equal to &#8211;<\/p>\n<p>(i)if the event is one referred to in paragraph (a), the amount of the qualifying expenditure remaining unallowed, and<\/p>\n<p>(ii)if the event is one referred to in paragraph (b), the amount of the qualifying expenditure remaining unallowed less the amount of the net proceeds of the sale.<\/p>\n<p>(3)Where a company which has incurred qualifying expenditure on the purchase of capacity rights sells all or any part of those rights and the amount of the net proceeds of the sale (in so far as they consist of capital sums) exceeds the amount of the qualifying expenditure remaining unallowed, if any, there shall, subject to and in accordance with this Chapter, be made on that company for the chargeable period related to the sale a charge (in this Chapter referred to as a &#8216;balancing charge&#8217;) on an amount equal to &#8211;<\/p>\n<p>(a)the excess, or<\/p>\n<p>(b)where the amount of the qualifying expenditure remaining unallowed is nil, the amount of the net proceeds of the sale.<\/p>\n<p>(4)Where a company which has incurred qualifying expenditure on the purchase of capacity rights sells a part of those rights and subsection (3) does not apply, the amount of any writing-down allowance made in respect of that expenditure for the chargeable period related to the sale or any subsequent chargeable period shall be the amount determined by &#8211;<\/p>\n<p>(a)subtracting the amount of the net proceeds of the sale (in so far as they consist of capital sums) from the amount of the expenditure remaining unallowed at the time of the sale, and<\/p>\n<p>(b)dividing the result by the number of complete years of the writing-down period which remained at the beginning of the chargeable period related to the sale,<\/p>\n<p>and so on for any subsequent sales.<\/p>\n<p>(5)References in this section to the amount of any qualifying expenditure remaining unallowed shall in relation to any event aforesaid be construed as references to the amount of that expenditure less any writing-down allowances made in respect of that expenditure for chargeable periods before the chargeable period related to that event, and less also the amount of the net proceeds of any previous sale by the company which incurred the expenditure of any part of the rights acquired by the expenditure, in so far as those proceeds consist of capital sums.<\/p>\n<p>(6)Notwithstanding subsections (1) to (5) &#8211;<\/p>\n<p>(a)no balancing allowance shall be made in respect of any expenditure unless a writing-down allowance has been, or, but for the happening of the event giving rise to the balancing allowance, could have been, made in respect of that expenditure, and<\/p>\n<p>(b)the total amount on which a balancing charge is made in respect of any expenditure shall not exceed the total writing-down allowances actually made in respect of that expenditure less, if a balancing charge has previously been made in respect of that expenditure, the amount on which that charge was made.<\/p>\n<p>769D.<\/p>\n<h4>Manner of making allowances and charges.<\/h4>\n<p>(1)An allowance or charge under this Chapter shall be made to or on a company in taxing the company&#8217;s trade if &#8211;<\/p>\n<p>(a)the company is carrying on a trade the profits or gains of which are or, if there were any, would be, chargeable to corporation tax for the chargeable period for which the allowance or charge is made, and<\/p>\n<p>(b)at any time in the chargeable period or its basis period the capacity rights in question, or other rights out of which they were granted, were used for the purposes of that trade.<\/p>\n<p>(2)Except where provided for in subsection (1), an allowance under this Chapter shall be made by means of discharge or repayment of tax and shall be available against income from capacity rights, and a charge under this Chapter shall be made under Case IV of Schedule D.<\/p>\n<p>769E.<\/p>\n<h4>Application of Chapter 4 of Part 9.<\/h4>\n<p>(1)Subject to subsection (2), Chapter 4 of Part 9 shall apply as if this Chapter were contained in that Part, and any reference in the Tax Acts to any capital allowance to be given by means of discharge or repayment of tax and to be available or available primarily against a specified class of income shall include a reference to any capital allowance given in accordance with section 769D(2).<\/p>\n<p>(2)In Chapter 4 of Part 9, as applied by virtue of subsection (1) to capacity rights, the reference in section 312(5)(a)(i) to the sum mentioned in paragraph (b) shall in the case of capacity rights be construed as a reference to the amount of the qualifying expenditure on the acquisition of the capacity rights remaining unallowed, computed in accordance with section 769C.<\/p>\n<p>769F.<\/p>\n<p>Commencement (Chapter 4).<br \/>\nThis Chapter shall come into operation on the date of the passing of the Finance Act 2003.<\/p>\n<p>Chapter 5<\/p>\n<h4>Taxation of companies engaged in knowledge development (ss. 769G-769R)<\/h4>\n<p>769G.<\/p>\n<h4>Interpretation and general.<\/h4>\n<p>(1)In this Chapter &#8211;<\/p>\n<p>&#8220;accounting period&#8221; in relation to a company, means an accounting period determined in accordance with section 27;<\/p>\n<p>&#8220;acquisition costs&#8221;, in relation to expenditure incurred on a qualifying asset, means the expenditure incurred on the acquisition of intellectual property, or rights over intellectual property, where that intellectual property is reflected in the value of the qualifying asset, but where expenditure incurred on acquiring the intellectual property is incurred otherwise than by means of a bargain made at arm&#8217;s length, that acquisition shall, for the purposes of this Chapter, be deemed to be for a consideration equal to the open market value of the intellectual property;<\/p>\n<p>&#8220;group&#8221; means a company and all of its 51 per cent subsidiaries;<\/p>\n<p>&#8220;group outsourcing costs&#8221;, in relation to a qualifying asset, means any amount incurred in carrying on research and development activities which results in a qualifying asset, where that amount is not qualifying expenditure but would be qualifying expenditure on a qualifying asset &#8211;<br \/>\n(a)if the research and development activities were carried on in a Member State, or<br \/>\n(b)but for subsection (2)(b)(iii) or (vi),<br \/>\nand shall not include any amount of qualifying expenditure or acquisition costs;<\/p>\n<p>&#8220;intellectual property&#8221;, other than for the purposes of the definition of &#8220;acquisition costs&#8221; or &#8220;marketing-related intellectual property&#8221; in this subsection and without prejudice to section 769R, means &#8211;<br \/>\n(a)a computer program, within the meaning of the Copyright and Related Rights Act 2000, but, where a computer program is a derivative work or adaptation, the portion of the computer program that represents the derivative work or the adaptation of the original work and the original work shall be treated as two separate computer programs, or<br \/>\n(b)an invention protected by &#8211;<br \/>\n(i)a qualifying patent,<br \/>\n(ii)any supplementary protection certificate issued under Council Regulation (EC) No. 469\/2009 of 6 May 2009 [OJ No. L152, 16.6.2009, p.1] concerning protection for medicinal products or any such certificate extended in accordance with Article 36 of Regulation (EC) 1901\/2006,<br \/>\n(iii)any supplementary protection certificate issued under Regulation (EC) No. 1610\/96 of the European Parliament and of the Council of 23 July 1996[OJ No. L198, 8.8.1996, p.30] concerning protection for plant protection products, or<br \/>\n(iv)any plant breeders&#8217; rights within the meaning of section 4 of the Plant Varieties (Proprietary Rights) Act 1980;<\/p>\n<p>&#8220;interest&#8221;, unless the context otherwise requires, includes any interest payable on a debt instrument, any discount on the issue of such an instrument, and any premiums paid or payable on redemption of such an instrument, or on the capital represented by such an instrument;<\/p>\n<p>&#8220;marketing-related intellectual property&#8221; includes trademarks, brands, image rights and other intellectual property used to market goods or services;<\/p>\n<p>&#8220;Member State&#8221; has the same meaning as &#8220;relevant Member State&#8221; has in section 766;<\/p>\n<p>&#8220;overall expenditure on the qualifying asset&#8221;, means &#8211;<br \/>\n(a)the qualifying expenditure incurred in relation to that qualifying asset, and<br \/>\n(b)the aggregate of the acquisition costs and the group outsourcing costs relating to that qualifying asset, incurred in any accounting period;<\/p>\n<p>&#8220;overall income from the qualifying asset&#8221; means the following amounts arising in respect of an accounting period &#8211;<br \/>\n(a)any royalty or other sums in respect of the use of that qualifying asset,<br \/>\n(b)where the sales price of a product or service, excluding both duty due or payable and any amount of value-added tax charged in the sales price, includes an amount which is attributable to a qualifying asset, such portion of the income from those sales as, on a just and reasonable basis, is attributable to the value of the qualifying asset,<br \/>\n(c)any amount for the grant of a licence to exploit that qualifying asset, and<br \/>\n(d)any amount of insurance, damages or compensation in relation to the qualifying asset,<br \/>\nwhere that amount is taken into account in computing, for the purposes of assessment to corporation tax, the profits of a trade, and overall income from qualifying assets shall be construed accordingly;<\/p>\n<p>&#8220;qualifying asset&#8221; means an asset which is intellectual property, other than marketing-related intellectual property, and which is the result of research and development activities;<\/p>\n<p>&#8220;qualifying expenditure on the qualifying asset&#8221; has the meaning assigned to it in subsection (2) and qualifying expenditure in relation to all qualifying assets shall be construed accordingly;<\/p>\n<p>&#8220;qualifying patent&#8221; means &#8211;<br \/>\n(a)a patent granted following substantive examination for novelty and inventive step, or<br \/>\n(b)a patent, other than a short term patent within the meaning of section 63 of the Patents Act 1992, or an equivalent provision in another jurisdiction, where &#8211;<br \/>\n(i)the Patents Office in the State, or equivalent Office elsewhere, has caused a search to be undertaken in relation to the invention and a search report (within the meaning of section 29 of the Patents Act 1992) prepared, and<br \/>\n(ii)either &#8211;<br \/>\n(I)the patent was granted prior to 1 January 2016, or<br \/>\n(II)the patent was granted on or after 1 January 2016 and before 1 January 2017 and a patent agent, within the meaning of section 106 of the Patents Act 1992, certifies that in his or her opinion such a patent meets the patentability criteria, in that the invention is susceptible of industrial application, new and involves an inventive step,<br \/>\nbut this paragraph is subject to section 769I(6)(a)(i)(VII);<\/p>\n<p>&#8220;relevant company&#8221; means a company which carries on a specified trade and is within the charge to tax in the State, and where two or more companies carry on that specified trade in partnership then each company that is within the charge to tax in the State shall be a relevant company;<\/p>\n<p>&#8220;research and development activities&#8221; has the meaning assigned to it in section 766;<\/p>\n<p>&#8220;specified trade&#8221; has the meaning assigned to it in subsection (3);<\/p>\n<p>&#8220;up-lift expenditure&#8221;, in relation to a qualifying asset, is the lower of &#8211;<br \/>\n(a)30 per cent of the amount of the qualifying expenditure on the qualifying asset, or<br \/>\n(b)the aggregate of acquisition costs and group outsourcing costs.<\/p>\n<p>(2)<\/p>\n<p>(a)Subject to paragraph (b), for the purposes of this Chapter, qualifying expenditure in relation to the qualifying asset, in respect of a company, means expenditure incurred by a relevant company, in any accounting period, wholly and exclusively in the carrying on by it of research and development activities in a Member State where such activities lead to the development, improvement or creation of the qualifying asset, being an amount &#8211;<\/p>\n<p>(i)which is allowable as a deduction in computing the profits or gains from a trade (otherwise than by virtue of section 307), or would be so allowable but for the fact that for accounting purposes it is brought into account in determining the value of an asset,<\/p>\n<p>(ii)expended on machinery or plant (other than specified intangible assets within the meaning of section 291A treated as machinery or plant by virtue of subsection (2) of that section where the specified intangible asset was acquired directly or indirectly from a member of the group) which qualifies for any allowance under Part 9,<\/p>\n<p>and for the purposes of this section, where a company engages a person who is not a member of the group, to carry on research and development activities on behalf of that company, then any sum payable to that person in respect of those activities shall be treated as if it were expenditure incurred by the company in the carrying on by it of research and development activities in a Member State.<\/p>\n<p>(b)Qualifying expenditure on the qualifying asset shall not include &#8211;<\/p>\n<p>(i)any amount of acquisition costs in relation to the qualifying asset,<\/p>\n<p>(ii)any amount of interest paid or payable,<\/p>\n<p>(iii)an amount paid or payable directly or indirectly to a member of the group to carry on research and development activities, whether under a cost sharing arrangement or otherwise,<\/p>\n<p>(iv)expenditure incurred under a cost sharing arrangement with another company to the extent that such expenditure exceeds an amount that would be determined by means of a bargain made at arm&#8217;s length,<\/p>\n<p>(v)any additional amount, agreed between members of the group, on an expense paid or payable indirectly through a group member to a person who is not a member of the group to carry on research and development activities, where that additional amount is to be retained by the group member, or<\/p>\n<p>(vi)any amount incurred if that amount &#8211;<\/p>\n<p>(I)may be taken into account as an expense in computing income of the company,<\/p>\n<p>(II)is expenditure in respect of which an allowance for capital expenditure may be made to the company, or<\/p>\n<p>(III)may otherwise be allowed or relieved in relation to the company,<\/p>\n<p>for the purposes of tax in a territory other than the State.<\/p>\n<p>(3)<\/p>\n<p>(a)Subject to paragraph (b), for the purposes of this Chapter, specified trade means a trade or part of a trade, other than an excepted trade within the meaning of section 21A, consisting of or including one or more of the following categories of activities &#8211;<\/p>\n<p>(i)the managing, developing, maintaining, protecting, enhancing or exploiting of intellectual property,<\/p>\n<p>(ii)the researching, planning, processing, experimenting, testing, devising, developing or other similar activity leading to an invention or creation of intellectual property, or<\/p>\n<p>(iii)the sale of goods or the supply of services that derive part of their value from activities described in subparagraphs (i) and (ii), where those activities were carried on by the relevant company.<\/p>\n<p>(b)In the case of a trade consisting partly of the carrying on of such activities, as described in paragraph (a), and partly of the carrying on of other activities, that part of the trade consisting solely of the carrying on of activities described in paragraph (a) shall be a specified trade.<\/p>\n<p>(4)Where a relevant company incurs expenditure for the purposes of a specified trade before the time that trade has been set up and commenced, then for the purposes of this Chapter other than section 769O, that expenditure shall be deemed to have been incurred in the first accounting period of that company.<\/p>\n<p>769H.<\/p>\n<h4>Families of products and assets.<\/h4>\n<p>(1)This section has effect where &#8211;<\/p>\n<p>&nbsp;<\/p>\n<p>(a)a relevant company has a number of qualifying assets, and<\/p>\n<p>(b)owing to the interlinked nature of the qualifying assets and their use in the specified trade, it would be reasonable to conclude that it would not be possible for the relevant company to identify the overall expenditure on each qualifying asset or the overall income from each qualifying asset.<\/p>\n<p>(2)In subsection (3) &#8220;family of assets&#8221; means the smallest grouping of assets referred to in subsection (1) for which the expenditure and income referred to in that subsection can reasonably be identified.<\/p>\n<p>(3)Where &#8211;<\/p>\n<p>(a)this section has effect, and<\/p>\n<p>(b)the relevant company opts for this Chapter to so apply,<\/p>\n<p>then this Chapter shall apply, in relation to the relevant company, as if references to qualifying assets were references to a family of assets.<\/p>\n<p>769I.<\/p>\n<h4>Corporation tax referable to a specified trade.<\/h4>\n<p>(1)For the purposes of this section qualifying profits, in relation to a qualifying asset, shall be the amount determined by the formula &#8211;<\/p>\n<p>&nbsp;<\/p>\n<p>where &#8211;<\/p>\n<p>QEis the qualifying expenditure on the qualifying asset,<\/p>\n<p>UEis the uplift expenditure,<\/p>\n<p>OEis the overall expenditure on the qualifying asset, and<\/p>\n<p>QAis the profit of the specified trade relevant to the qualifying asset before taking account of any allowance available under subsection (5).<\/p>\n<p>(2)<\/p>\n<p>(a)Where qualifying profits in respect of a qualifying asset arise in the course of a specified trade, then a relevant company may make a claim in respect of that qualifying asset under this section, in the return required to be filed pursuant to section 959I.<\/p>\n<p>(b)Subject to section 769P, any claim under this section shall be made once in respect of each qualifying asset and shall be made within 24 months from the end of the accounting period to which the claim relates.<\/p>\n<p>(c)Where under this section a claim is made to include the overall income from the qualifying asset in the income of a specified trade in any accounting period, then all amounts of income and expenditure related to that qualifying asset shall be taken to continue to relate to that specified trade until such time as the qualifying asset is disposed of or ceases to be used.<\/p>\n<p>(3)Where during an accounting period a relevant company, which has made a claim under this section, carries on a specified trade, those activities shall be treated for the purposes of this Chapter, Chapter 2 of Part 8, Chapter 3 of Part 12 and Part 41A, as a separate trade distinct from any other trade carried on by the company.<\/p>\n<p>(4)<\/p>\n<p>(a)Subject to paragraph (b), in order to determine the profits or gains of the specified trade to be charged to tax under Case I of Schedule D &#8211;<\/p>\n<p>(i)the income of the trade shall be the overall income from qualifying assets in respect of which a claim has been made under this section, and<\/p>\n<p>(ii)any necessary apportionment shall be made so that expenses laid out or expended in earning the income referred to in subparagraph (i) shall be attributed to the specified trade on a just and reasonable basis and the amount of the expenses shall be an amount which would be attributed to a distinct and separate company, engaged in the same activities, if it were independent of, and dealing at arm&#8217;s length with the relevant company.<\/p>\n<p>(b)Where a relevant company has carried on a specified trade for one or more previous accounting periods, then the method or methods of apportionment used for the purposes of this section shall be applied consistently between accounting periods, unless there has been a significant change in the conduct of the relevant company&#8217;s trade or business.<\/p>\n<p>(5)In computing for the purposes of corporation tax the profits of a relevant company&#8217;sspecified trade for an accounting period, insofar as the profits are referable to qualifying profits from a qualifying asset in respect of which a claim was made under this section, there shall be made an allowance equal to 20 per cent of the qualifying profits and that allowance shall be treated as a trading expense of the trade in that period.<\/p>\n<p>(6)<\/p>\n<p>(a)The Revenue Commissioners may, in relation to a claim by a relevant company that a profit is a qualifying profit &#8211;<\/p>\n<p>(i)consult with any person (in this subsection referred to as an &#8220;expert&#8221;) who in their opinion may be of assistance in ascertaining the extent to which:<\/p>\n<p>(I)expenditure is qualifying expenditure on the qualifying asset;<\/p>\n<p>(II)expenditure is overall expenditure on the qualifying asset;<\/p>\n<p>(III)income is overall income from the qualifying asset;<\/p>\n<p>(IV)intellectual property is, or forms part of, a qualifying asset;<\/p>\n<p>(V)any apportionment is done on a just and reasonable basis;<\/p>\n<p>(VI)arm&#8217;s length values have been correctly determined; or<\/p>\n<p>(VII)a patent, referred to in paragraph (b) of the definition of &#8220;qualifying patent&#8221; in section 769G(1), meets the patentability criteria set out in that paragraph,<\/p>\n<p>and<\/p>\n<p>(ii)notwithstanding any obligation as to secrecy or other restriction on the disclosure of information imposed by, or under, the Tax Acts or any other statute or otherwise, but subject to paragraph (b), disclose to the expert any detail in the company&#8217;s claim under this section which they consider necessary for the purposes of such consultation.<\/p>\n<p>(b)<\/p>\n<p>(i)Before disclosing information to any expert under paragraph (a), the officer of the Revenue Commissioners shall give the company a notice in writing of &#8211;<\/p>\n<p>(I)the officer&#8217;s intention to disclose information to an expert,<\/p>\n<p>(II)the information that the officer intends to disclose,<\/p>\n<p>(III)the identity of the expert whom the officer intends to consult,<\/p>\n<p>and shall allow the company a period of 30 days after the date of the notice to show to the officer&#8217;s satisfaction that disclosure of such information to that expert could prejudice the company&#8217;s trade or business.<\/p>\n<p>(ii)Where, on the expiry of the period referred to in subparagraph (i), it is not shown to the satisfaction of the officer that disclosure could prejudice the company&#8217;s trade or business, the officer may disclose the information on the expiry of a further period of 30 days after giving notice in writing of the officer&#8217;s decision to disclose the information.<\/p>\n<p>(iii)A company aggrieved by an officer&#8217;s decision made under subparagraph (ii) in respect of it may appeal the decision to the Appeal Commissioners, in accordance with section 949I, within the period of 30 days after the date of that decision.<\/p>\n<p>769J.<\/p>\n<h4>Interaction with sections 766, 766A and 766B.<\/h4>\n<p>For the purposes of determining the amount of any claim made pursuant to section 766(4B)(a), the excess referred to in that section shall be calculated as if this Chapter did not apply.<\/p>\n<p>769K.<\/p>\n<h4>Adaptation of provisions relating to relief for relevant trading losses and relevant charges on income.<\/h4>\n<p>(1)For the purposes of this section relevant trading losses and relevant trading charges relating to a specified trade relevant to a qualifying asset which was the subject of a claim under section 769I(2) shall be the amount of such losses or charges as reduced by &#8211;<\/p>\n<p>QE + UE<\/p>\n<p>OE<\/p>\n<p>where &#8211;<\/p>\n<p>QEis the qualifying expenditure on the qualifying asset,<\/p>\n<p>UEis the uplift expenditure, and<\/p>\n<p>OEis the overall expenditure on the qualifying asset.<\/p>\n<p>(2)Notwithstanding any other provision of the Tax Acts, where a company makes a claim for relief under &#8211;<\/p>\n<p>(a)section 243A, that section shall apply, with any necessary modifications, as if the amount of relevant trading charges on income relating to a specified trade were reduced by 20 per cent,<\/p>\n<p>(b)section 396A or 420A, the section shall apply, with any necessary modifications, as if the amount of a relevant trading loss arising in the course of a specified trade were reduced by 20 per cent, or<\/p>\n<p>(c)section 243B, 396B or 420B, the section shall apply, with any necessary modification, as if the reference in the formula to &#8220;R&#8221; were a reference to &#8220;R as reduced by 20 per cent&#8221;.<\/p>\n<p>(3)For the purposes of determining the amount of relief available for relevant trading charges or relevant trading losses, as the case may be, after the making of a claim for relief under any of the provisions referred to in subsection (2) as applied by that subsection (in this subsection referred to as &#8216;the first-mentioned claim&#8217;), the amount of relevant trading charges or relevant trading losses, as the case may be, available for any subsequent claims shall be reduced by 125 per cent of the amount claimed under the first-mentioned claim.<\/p>\n<p>769L.<\/p>\n<h4>Documentation.<\/h4>\n<p>(1)<\/p>\n<p>(a)A relevant company in relation to all qualifying assets in respect of which a claim was made under section 769I(2) shall have available such records as may reasonably be required for the purposes of determining whether, in relation to such an asset, the qualifying profits has been computed in accordance with this Chapter.<\/p>\n<p>(b)The records shall demonstrate that &#8211;<\/p>\n<p>(i)overall income from the qualifying asset,<\/p>\n<p>(ii)qualifying expenditure on the qualifying asset, and<\/p>\n<p>(iii)overall expenditure on the qualifying asset,<\/p>\n<p>have been tracked, and the relevant company shall have available documentation on this tracking which shows how such expenditures and income are linked to the qualifying asset.<\/p>\n<p>(c)If the relevant company has opted under subsection (3) of section 769H for this Chapter to apply in the manner specified in that subsection, then, in relation to any family of assets referred to in that subsection, the relevant company shall also have available records that support the reasonableness of the company having opted as mentioned in this paragraph, including such records as are required to support &#8211;<\/p>\n<p>(i)the commonality of scientific, technological or engineering challenges underlying the research and development activities which were undertaken and which resulted in the qualifying assets,<\/p>\n<p>(ii)the consistency of the chosen method of grouping with the organisation of research and development activities carried on by the relevant company,<\/p>\n<p>(iii)the creation of a nexus between expenditures and a family of assets, or<\/p>\n<p>(iv)the choice of a family of assets with which to create that nexus,<\/p>\n<p>as may be relevant in each case.<\/p>\n<p>(d)A relevant company in claiming that a derivative work or an adaptation represents a qualifying asset shall have available records which &#8211;<\/p>\n<p>(i)identify the original work and the derivation or adaptation therefrom,<\/p>\n<p>(ii)the costs associated with both the original work and the derivative work or the adaptation, and<\/p>\n<p>(iii)support any method of apportionment of income between the original work and the derivative work or adaptation.<\/p>\n<p>(2)The requirements of this section shall not apply to expenditures incurred prior to 1 January 2016.<\/p>\n<p>(3)The records referred to in subsection (1) shall be prepared on a timely basis and, subject to subsection (4), the obligations contained in subsections (3) and (4) of section 886 to keep and retain records and linking documents apply to all records, documents or other data created or maintained manually or by any electronic means for the purposes of this Chapter.<\/p>\n<p>(4)For the purposes of this section, section 886(4)(a) shall apply as if for subparagraphs (i) and (ii) there were substituted:<\/p>\n<p>&#8220;in respect of each qualifying asset, for a period of 6 years from the end of the accounting period in which a return has been delivered in respect of the last accounting period in which that asset was a qualifying asset and&#8221;.<\/p>\n<p>(5)An officer of the Revenue Commissioners may by notice in writing require a relevant company to furnish the officer with such information or particulars as may be necessary for the purposes of giving effect to this Chapter.<\/p>\n<p>(6)<\/p>\n<p>(a)The Revenue Commissioners may make regulations for the purposes of this section and those regulations may contain such incidental, supplemental or consequential provisions as appear to the Revenue Commissioners to be necessary or expedient &#8211;<\/p>\n<p>(i)to enable persons to fulfil their obligations under this Chapter or under regulations made under this section, or<\/p>\n<p>(ii)to facilitate the operation of the provisions of this Chapter or regulations made under this section in an efficient manner.<\/p>\n<p>(b)Regulations made under this section shall be laid before D\u00e1il \u00c9ireann as soon as may be after they are made, and if a resolution annulling those regulations is passed by D\u00e1il \u00c9ireann within the next 21 days on which D\u00e1il \u00c9ireann has sat after the regulations are laid before it, the regulations shall be annulled accordingly, but without prejudice to the validity of anything previously done under them.<\/p>\n<p>(7)Failure to have available such documentation as is required under this section shall, notwithstanding anything else in this Chapter, result in a company not being a relevant company for the purposes of this Chapter in respect of the accounting period to which the failure relates.<\/p>\n<p>769M.<\/p>\n<h4>Anti-avoidance.<\/h4>\n<p>Qualifying expenditure on the qualifying asset and overall income from the qualifying asset shall not include any amount unless that amount is expended or received for bona fide commercial purposes and is not part of a scheme or arrangement the main purpose, or one of the main purposes, of which is the avoidance of tax.<\/p>\n<p>769N.<\/p>\n<h4>Application of Part 35A.<\/h4>\n<p>Where a relevant company is a company to which Part 35A applies, then section 835D shall apply, with any necessary modifications, to:<\/p>\n<p>(a)determining the market value of the intellectual property, as required by the definition of acquisition costs;<\/p>\n<p>(b)apportioning income, as required in the definition of &#8220;overall income from the qualifying asset&#8221;;<\/p>\n<p>(c)apportionments of research and development activities as required in the definition of &#8220;qualifying expenditure on the qualifying asset&#8221;;<\/p>\n<p>(d)any apportionments required under section 769I; and<\/p>\n<p>(e)any apportionments required under section 769O.<\/p>\n<p>769O.<\/p>\n<h4>Transitional measures.<\/h4>\n<p>(1)Subject to subsection (4) for the purposes of determining the qualifying profits in relation to a qualifying asset for accounting periods beginning on or after 1 January 2016 but on or before 31 December 2019 &#8211;<\/p>\n<p>(a)acquisition costs in relation to a qualifying asset shall include any acquisition costs incurred prior to 1 January 2016,<\/p>\n<p>(b)group outsourcing costs in relation to a qualifying asset shall include any group outsourcing costs incurred prior to 1 January 2016 and where group outsourcing costs incurred prior to 1 January 2016 related to more than one qualifying asset, those costs shall be apportioned on a just and reasonable basis, and<\/p>\n<p>(c)qualifying expenditure on the qualifying asset shall &#8211;<\/p>\n<p>(i)be calculated with reference to qualifying expenditure in relation to all qualifying assets in the 48 month period ending on the last day of the accounting period, and<\/p>\n<p>(ii)be &#8211;<\/p>\n<p>(I)calculated in accordance with this Chapter, and<\/p>\n<p>(II)calculated as a portion of the total qualifying expenditure on qualifying assets, where the expenditure is incurred prior to 1 January 2016.<\/p>\n<p>(2)Subject to subsection (4), for the purposes of determining the qualifying profits in relation to a qualifying asset for accounting periods beginning on or after 1 January 2020 &#8211;<\/p>\n<p>(a)acquisition costs in relation to a qualifying asset shall include any acquisition costs incurred prior to 1 January 2016.<\/p>\n<p>(b)group outsourcing costs in relation to a qualifying asset shall include any group outsourcing costs incurred prior to 1 January 2016 and where such group outsourcing costs incurred prior to 1 January 2016 related to more than one qualifying asset, those costs shall be apportioned on a just and reasonable basis.<\/p>\n<p>(c)qualifying expenditure on the qualifying asset shall not include any amount incurred prior to 1 January 2016.<\/p>\n<p>(3)A relevant company in relation to all qualifying assets to which this section applies shall have available such records as may reasonably be required for the purposes of determining whether, in relation to such an asset, the qualifying profit has been computed in accordance with this Chapter and section 769L shall apply to these records.<\/p>\n<p>(4)Where, in advance of first making a claim under section 769I, a company has documentation in respect of &#8211;<\/p>\n<p>(a)group outsourcing costs in relation to a qualifying asset, or<\/p>\n<p>(b)qualifying expenditure on the qualifying asset,<\/p>\n<p>incurred prior to 1 January 2016 which satisfies the requirements of section 769L(1) then notwithstanding subsections (1) and (2) that company may use amounts calculated with reference to that documentation in applying section 769I.<\/p>\n<p>769P.<\/p>\n<h4>Time limits.<\/h4>\n<p>(1)Where a company has submitted an application to a Patents Office which would result in a qualifying asset if the patent or protection sought were granted, then the company may make a claim under section 769I(2) &#8211;<\/p>\n<p>(a)in the accounting period in which the application is submitted, and if the application is subsequently refused then the company shall amend each return, within the meaning of section 959A, in which a deduction under section 769I(5) was claimed, and pay any additional tax and interest due accordingly, or<\/p>\n<p>(b)subject to subsection (2), in the accounting period in which the application is granted, and notwithstanding anything to the contrary in section 959AA or section 865, a Revenue officer shall amend an assessment for each accounting period in which overall income from a qualifying asset arose, and any tax to be repaid shall be repaid accordingly and for the purposes of section 865A any such claim shall not be a valid claim on any date before the return, within the meaning of section 959A, for the accounting period in which the application is granted is filed.<\/p>\n<p>(2)Where a company intends to make a claim pursuant to subsection (1)(b), then in respect of each accounting period prior to the accounting period in which the application is granted the company shall make a claim (a &#8220;protective claim&#8221;) for the amount of the allowance that may be claimed upon the application being granted, and any subsequent claim pursuant to subsection (1)(b) shall not exceed the amount of those protective claims.<\/p>\n<p>769Q.<\/p>\n<h4>Application.<\/h4>\n<p>This Chapter shall apply to accounting periods which commence on or after 1 January 2016 and before 1 January 2027.<\/p>\n<p>769R.<\/p>\n<h4>Companies with income arising from intellectual property of less than \u20ac7,500,000.<\/h4>\n<p>(1)In this section &#8211;<\/p>\n<p>&#8220;average overall income from intellectual property&#8221; in respect of an accounting period means the lower of &#8211;<\/p>\n<p>(a)the overall income from intellectual property for an accounting period, or<\/p>\n<p>(b)an amount calculated as:<\/p>\n<p>A x N<\/p>\n<p>where &#8211;<\/p>\n<p>Ais the average monthly overall income from intellectual property for the last 60 months, and<\/p>\n<p>Nis the number of months in the accounting period;<\/p>\n<p>&#8220;company threshold amount&#8221; means \u20ac7,500,000 and where an accounting period is shorter than 12 months, this amount shall be reduced proportionately;<\/p>\n<p>&#8220;intellectual property for small companies&#8221; means inventions that are certified by the Controller of Patents, Designs and Trade Marks as being novel, non-obvious and useful;<\/p>\n<p>&#8220;overall income from intellectual property&#8221; means the following amounts arising to the company in respect of an accounting period &#8211;<\/p>\n<p>(a)any royalty or other sums in respect of the use of intellectual property,<\/p>\n<p>(b)where the sales price of a product or service, excluding both duty due or payable and any amount of value-added tax charged in the sales price, includes an amount which is attributable to a qualifying asset, such portion of the income from those sales as, on a just and reasonable basis, is attributable to the value of the qualifying asset,<\/p>\n<p>(c)any amount for the grant of a licence to exploit intellectual property, and<\/p>\n<p>(d)any amounts of insurance, damages or compensation in relation to intellectual property,<\/p>\n<p>where that amount is taken into account in computing, for the purposes of assessment to corporation tax, the profits of a trade;<\/p>\n<p>&#8220;turnover threshold amount&#8221; means \u20ac50,000,000 and where an accounting period is shorter than 12 months, this amount shall be reduced proportionately.<\/p>\n<p>(2)<\/p>\n<p>(a)This section shall apply to a relevant company and an accounting period, where the relevant company satisfies the conditions set out in paragraph (b).<\/p>\n<p>(b)The conditions required by this paragraph are &#8211;<\/p>\n<p>(i)the company has average overall income from intellectual property not in excess of the company threshold amount,<\/p>\n<p>(ii)where that company is a member of a group, the group has turnover not in excess of the turnover threshold amount, and<\/p>\n<p>(iii)the company is a micro, small or medium-sized enterprise within the meaning of the Annex to Commission Recommendation 2003\/361\/EC of 6 May 2003 concerning the definition of micro, small and medium-sized enterprises.<\/p>\n<p>(3)In relation to a relevant company and an accounting period to which this section applies, this Chapter shall apply as if the definition of &#8220;intellectual property&#8221; in section 769G(1) also included intellectual property for small companies.<\/p>\n<p>(4)A company claiming to be a relevant company to which this section applies shall have available such records as may reasonably be required for the purposes of determining whether it is a relevant company to which this section applies and section 769L shall apply to those documents.<\/p>\n<!--themify_builder_content-->\n<div id=\"themify_builder_content-11084\" data-postid=\"11084\" class=\"themify_builder_content themify_builder_content-11084 themify_builder tf_clear\">\n    <\/div>\n<!--\/themify_builder_content-->\n","protected":false},"excerpt":{"rendered":"<p>The Knowledge Box Regime The Finance Act 2015 introduced a knowledge development box regime. A 6.25% tax rate applies to profits from qualifying assets earned by an Irish company carrying on a specified trade. The profits available are the proportion of the profits of the specified trade that the expenditure on qualifying assets bears to [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[398,351],"tags":[],"_links":{"self":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/11084"}],"collection":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/comments?post=11084"}],"version-history":[{"count":17,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/11084\/revisions"}],"predecessor-version":[{"id":34810,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/11084\/revisions\/34810"}],"wp:attachment":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/media?parent=11084"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/categories?post=11084"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/tags?post=11084"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}