Knowledge Development Box (KDB)
Reducing your corporation tax rate on income from innovation
What Is the Knowledge Development Box?
The Knowledge Development Box (KDB) is a tax relief that allows companies to apply a 6.25% corporation tax rate on profits arising from certain intellectual property (IP) assets developed in Ireland.
It is designed to encourage innovation and ensure that Irish companies benefit from lower tax rates on qualifying income.
Who Can Benefit?
The KDB is available to Irish companies that:
- Develop patents or copyrighted software in Ireland
- Earn income from qualifying IP assets
- Already claim (or could claim) the R&D Tax Credit
- Operate in technology, life sciences, manufacturing, or other innovative industries
What’s Included?
Our KDB advisory service helps you determine eligibility and maximise your benefit:
- Review of IP assets to confirm qualifying income
- Guidance on the nexus approach required by Revenue
- Calculation of profits eligible for the 6.25% tax rate
- Integration with your R&D Tax Credit claim for maximum benefit
- Preparation and filing of supporting documentation with Revenue
- Ongoing compliance support and audit readiness
Why It Matters
- Significant savings – Reduce your corporation tax rate from 12.5% to 6.25% on qualifying income
- Encourage innovation – Reward for companies developing IP in Ireland
- Global competitiveness – Align with international standards on IP taxation
- Peace of mind – Ensure compliance with strict Revenue and OECD rules
Frequently Asked Questions
What type of IP qualifies?
- Patents and computer software developed in Ireland.
- Certain smaller IP assets may also qualify if Revenue guidelines are met.
Can KDB be combined with the R&D Tax Credit?
Yes, many companies claim both, creating substantial savings.
Do all profits qualify for the reduced rate?
No, only income directly linked to the qualifying IP under the “nexus approach.”
Next Step
If your business develops software or patents, you could already qualify for the KDB. Let us review your activities and help unlock the benefits.
