New tax relief for profits on patented products

Businesses in Northern Ireland are being encouraged to take advantage of a new tax relief on profits from patented products.

Patent Box, which came into effect at the beginning of the month, means that a 10% rate of corporation tax will apply to profits attributable to patents, much lower than the standard rate of 23%.

Companies which receive patent royalties, sell patented products, or use patented processes as part of their business, can make large tax savings. The CBI in Northern Ireland has organised an information event on the new scheme and the organisation’s assistant director, Kirsty McManus, said that the measure makes the region a good place to do business.

“It is vitally important that businesses in Northern Ireland, no matter what size or industry carefully consider the direct benefits of the Patent Box, which will provide a rate of 10% corporation tax to profits attributable to patents, which is much lower than the standard rate of 23% and 2.5% lower than counterparts in the Republic of Ireland,” she said.

“An effective patent box could boost high-value manufacturing jobs, and the tax credit changes should encourage businesses in Northern Ireland to invest in R&D (research and development) at all points in the business cycle.

“If you put the Patent Box alongside R&D tax credits, which allows companies to write off research costs against their tax bills, we now have a very attractive regime for innovative businesses. That’s going to be crucial for the knowledge economy that we need to stimulate here.”

‘Patent Box-not Pandora’s box’ will take place tonight and will feature tax and patent experts from Ernst & Young. Delegates will also hear from local SME ‘Takker Ltd‘, which has featured on Dragons’ Den, and hear how they will exploit the Patent Box.

Source: belfasttelegraph.co.uk