Ireland ‘losing out’ on intellectual property tax

Ireland may be missing out on a global shift by multinationals to shift their intellectual property away from tax havens as the Government cannot afford to introduce a tax regime to compete with the UK and Luxembourg.

A parliamentary question by Deputy Roisin Shorthall revealed that since the Government introduced an intellectual property regime in 2009 firms had claimed €205 million in tax relief on intellectual property rights based in Ireland.

Finance Minister Michael Noonan said that companies which base their intellectual property here are entitled to tax reliefs based on the value of the asset.

“Allowances are based on the amount charged to the profit and loss account in respect of the amortisation or depreciation of the intangible asset. Alternatively, companies can opt for a write-down of expenditure over 15 years at a rate of 7% per year, with 2% in the final year,” he said.

While the figures sound large, tax director with PwC, Nicola Quinn, said that the uptake on the Irish intellectual property regime has been quite disappointing.

“It was designed to attract more intellectual property to Ireland, but the uptake has been quite low,” she said.

Ms Quinn said that the increasing focus on corporations international tax process should present Ireland with an opportunity.

“The... problem is that Ireland can’t afford to challenge as all tax benefits have to be cost neutral.”