THE NEW IRISH IP REGIME AND OTHER RECENT DEVELOPMENTS

Transcription

1 THE NEW IRISH IP REGIME AND OTHER RECENT DEVELOPMENTS 1

2 RUNNING ORDER 1. Latest developments on Apple and Ireland 1. Irelands Food and Beverage sector An opportunity 1. A location for IP and intangibles 1. Who are the latest entrants to Ireland? 2

3 01 LATEST DEVELOPMENTS ON APPLE AND IRELAND

4 in June 2014 the European Commission opened a formal investigation to examine whether decisions by the tax authorities in Ireland with regard to the corporate income tax to be paid by two of the company s Irish subsidiaries comply with European Union rules on state aid. If the European Commission were to take a final decision against Ireland, it could require changes to existing tax rulings that, in turn, could increase the company s taxes in the future. The European Commission could also require Ireland to recover from the company past taxes reflective of the disallowed state aid. 4

5 Financial Times quotes unnamed Brussels officials as saying that any ruling could set a new record for a state-aid investigation penalty by exceeding 1 billion It is clear that obtaining information is both challenging and time consuming. We do not necessarily get the information the first time or the second time. Therefore we will not meet the first deadline to be done by the end of the second quarter. We will do our best. Ms Vestager, European Commission Action taken by Ireland. Change to the tax residency rules Future Apple structures no longer feasible 5

6 02 IRELANDS FOOD AND BEVERAGE SECTOR: A MARKET SNAPSHOT

7 Irish Market Snapshot 2014 The 5 th consecutive year of growth in exports;

8 Irish Market Snapshot Value of Irish Food & Beverage exports in bn Cumulative growth of 45% since 2009;

9 Irish Market Snapshot Beef: Beef volumes jumped by almost 13% in 2014; Despite the difficult market environment for some meats in 2014, the value of meat and livestock exports grew by 3% to just over 3.6 billion; The opening of the US market for Irish beef represents a significant opportunity for the sector. The contracting of US cattle herds is leading to situation where US steer prices are currently 25% higher than European prices compared to the historical position of being 15% - 20% lower.

10 Irish Market Snapshot Dairy: 55% rise in the value of dairy exports from 2009 ( 1.96bn) to 2014 ( 3.06bn); In 2014, Irish dairy exports are estimated to have increased by 30% to Asia and 18% to North America and 19% to Middle East; Ireland supplies 10% of the global infant milk formula despite only having 1% of global dairy production; The removal of milk quotas in 2015 has led to substantial developments within the Irish dairy industry; Under Food harvest 2020, the industry is targeting a 50% increase in milk production volumes on the average of 2008 / This represents an extra 2.5 billion litres of milk.

11 A TASTE OF OUR CLIENTS

12 03 A LOCATION FOR IP AND INTANGIBLES

13 ADVANTAGES OF IRELAND AS A LOCATION FOR IP 12.5% trading rate Capital allowances on capital expenditure Stamp Duty relief on acquisition of IP Tax free exit achievable (e.g. by migration or sale of IP company) R&D tax credits Tax authority rulings not required Knowledge Development Box Wide treaty network - minimise WHT on inbound royalty payments 13

14 KNOWLEDGE DEVELOPMENT BOX Announcement of Knowledge Development Box KDB regime will be best in class Rate of circa 6.25% likely Comply with OECD & EU requirements To be introduced in 2016.or possibly sooner, subject to EU and OECD reviews Consultation process design & implementation 14

15 KNOWLEDGE DEVELOPMENT BOX Income based regime Qualifying IP Patents and assets functionally equivalent to patents Scope for wide interpretation Qualifying income - OECD modified nexus approach BEPS substantial activity IP income linked to R&D expenditure More information in October s Budget??? 15

16 ACQUISITION OF INTELLECTUAL PROPERTY 100% tax depreciation on acquisition of IP o o o Depreciation can be offset against trading income receipts Specified intangible assets Amortisation charge or 15 years No stamp duty on the acquisition of IP Royalty income taxable at 12.5% 16

17 RESEARCH & DEVELOPMENT Effective tax deduction of 37.5% 12 month deadline Excess R&D tax credit can be offset against other tax liabilities e.g. payroll tax Remaining excess can be repaid to the company Excess R&D tax credit can be used to pay key employees tax free Effective way of remunerating key employees in a tax efficient manner Credit available in respect of the cost of acquisition or refurbishment of new premises used for R&D 17

18 04 WHO ARE THE LATEST ENTRANTS TO IRELAND?

19 EXPANDING THEIR IRISH PRESENCE 19

20 20 QUESTIONS & ANSWERS

21 CONTACT US Noel Cunningham Claire Healy Cormac Kelleher Harcourt Road, Dublin 2 Harcourt Road, Dublin 2 Harcourt Road, Dublin 2 Tel: +353 (01) Tel: +353 (01) 449 Tel: +353 (01) ncunningham@mazars.ie chealy@mazars.ie ckelleher@mazars.ie mazars.ie

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