769R Companies with income arising from intellectual property of less than €7,500,000.

Summary

Companies who meet certain size criteria and who have intellectual property which is not protected by a patent may be able to benefit from relief under this chapter in relation to a third category of assets pursuant to this section.

Details

Definitions

(1) ‘average overall income from intellectual property’, for each accounting period, is the lower of–

(a) the overall income from intellectual property (as defined) for an accounting period, or

(b) an amount calculated as:

• Average Monthly Income X N
• where –
• Average Monthly Income is the average monthly overall income from intellectual property for the last 60 months, and
• N is the number of months in the accounting period;

‘company threshold amount’ means €7,500,000, reduced proportionately where an accounting period is shorter than 12 months;

‘intellectual property for small companies’ means intellectual property in the nature of assets that are certified by the Controller of Patents, Designs and Trade Marks as being novel, non-obvious and useful;

‘overall income from intellectual property’ is similar to the definition of ‘overall income from qualifying assets’ contained in section 769G except that the amounts arise from intellectual property, in its normal meaning, rather than from qualifying assets (as defined);

‘turnover threshold amount’ means €50,000,000, reduced proportionately where an accounting period is shorter than 12 months;

(2) A company which wishes to make a claim pursuant to this section must meet the following conditions:

1. the company has average overall income from intellectual property not in excess of the company threshold amount,
2. where that company is a member of a group, the group has turnover not in excess of the turnover threshold amount, and
3. the company is a micro, small or medium sized enterprise within the meaning of the State Aid law.

(3) Where a company meets the conditions set out in subsection (2), then Chapter 5 applies to that company as if the definition of ‘intellectual property’ in section 769G(1) also included ‘intellectual property for small companies’.

(4) Additional documentation obligations are placed on a company which is claiming relief on intellectual property for small companies. Such a company must have documentation to support its contention that it is a company to which this section applies.

The provisions of section 769R are subject to a commencement order.

Relevant Date: Finance Act 2021