The Knowledge Development Box (Certification of Inventions) Act 2017 (Act) was signed into law on 12 April 2017. The Knowledge Development Box scheme (KDB) was introduced by the Finance Act 2015 for companies whose accounting period commences on or after 1 January 2016.

Under KDB, income arising from patents, copyrighted software and certain other intellectual property is effectively taxed at 6.25%.

Certification scheme

The Act provides a legislative framework for a new scheme aimed at small and medium enterprises (SMEs) involved in research and development activities in Ireland to allow them to avail of the reduced tax rate under KDB. The Act provides that to avail of the KDB, eligible SMEs must obtain a Knowledge Development Box Certificate (KDB Certificate) from the Controller of Patents, Designs and Trade Marks (Controller) who will oversee and operate the certification.


Eligible SMEs are those which employ less than 250 people with income arising from intellectual property of less than €7.5 million, and with global turnover of less than €50 million or a balance sheet of less than €43 million.

Patent agent opinion

Section 4(1) of the Act provides that an invention must be novel, non-obvious and useful, to qualify for a KDB Certificate. An application for a KDB Certificate must contain a full description of the invention and be accompanied by an opinion from a patent agent that the invention meets the section 4(1) criteria. If the Controller is satisfied that the invention meets all the requirements it will qualify for the KDB Certificate.

Amendments to Patents Act

Part 6 of the Act also amends the Patents Act 1992. In future, patent applications made after the commencement of Part 6 must be accompanied by a report incorporating a written opinion as to as to the patentability of an invention, with the intention of ensuring long term patents remain eligible for the KDB.