UK tax measures pose new threat to Smart Economy in Ireland - Deloitte

Finance Bill measures now key to maintaining R&D competitiveness

Plans announced today by the UK to cut corporation tax on Intellectual Property to 10% from 28% present a new and substantial threat to the development of a Smart Economy in Ireland which needs to be addressed in the Finance Bill.

In his pre-Budget report, the Chancellor of the Exchequer Alistair Darling announced the introduction of a new patent box regime to enhance the attractiveness of the UK for innovative industries and a new tax rate.

According to Joan O’Connor, International Tax Partner, Deloitte said the Minister for Finance should use the opportunity in the Finance Bill to introduce a range of measures to ensure Ireland remains competitive on Intellectual Property following the UK move.

Commenting, O’Connor said: “The Minister for Finance today recognised the importance of the Science Technology and Innovation (STI) agenda for the Irish economy, noting that he will streamline the sources of funding and also focus on the commercial return.

“While noting the enhance incentives made available over the last two years in increased R&D benefits and the new IP regime, he has stated that he will consider the report from the Innovation Task force in framing the content of the Finance Bill due in January 2010.

“With the major economies of the world out of recession and multinationals looking at refocusing their operations for growth, and the question being where next, for enterprise in the domestic and international context, it is essential that the Minister revisits this area at Finance Bill stage and demonstrates that he is maintaining the competitiveness of our IP regime in its totality. Today’s move by the UK makes this more pressing.”

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