Technology & Intellectual Property
Ireland is a world-leading centre for the tech industry, and serves as a gateway for international technology businesses seeking to enter or serve the European market. For instance, nine of the world’s top ten technology companies are located in Ireland, eight of which are our clients.
The Irish Government takes an active role in this regard, proactively promoting Ireland as a global digital hub.
This support from the top makes Ireland an ideal location for international tech, online and communication companies, as is evident from the thriving tech ecosystem. For instance, “Silicon Docks” – the area of Dublin in which our head office is located – is the location for global giants like Google, Facebook, LinkedIn, Twitter and Airbnb.
A combination of Ireland’s liberalised and vital electronic communications sector, a highly educated workforce, and an internationally respected Data Protection Authority are some of the benefits for a technology company locating its EU headquarters in Ireland.
From a technology contracting perspective, Ireland is a common law jurisdiction, which means that its legal concepts are recognised and understood by most foreign investors, including US multi-nationals.
These factors also make Ireland attractive for international high potential start-ups and entrepreneurs, which have a growing representation in Ireland, particularly in software, online, AI and fintech sectors.
Privacy & Data Security
Our market-leading Privacy and Data Security team provide world-class expertise and strategic advice on all issues surrounding data protection, privacy law and cybersecurity compliance. With clients ranging from the world’s best known data-driven companies, to high potential start-ups, we offer unparalleled global expertise coupled with detailed local knowledge.
We have earned a reputation as one of the premier teams in the EU advising on the GDPR (General Data Protection Regulation). We advise US and other non-European companies on global privacy structures, including how such companies can benefit from the GDPR’s “one-stop-shop” by establishing its operations in Ireland. We also advise on EU-wide compliance with privacy law, and complex multi-jurisdictional data transfers, outsourcing arrangements, processing (including big data analytics) and services agreements. As part of this trans-boundary work, we frequently co-ordinate complex and international data protection projects with counsel across Europe.
Intellectual Property (IP) covers a range of intangible assets arising out of the creativity, innovation and goodwill of a business. Ireland’s strong legal and common law framework, advantageous tax regime for the exploitation of IP and highly educated workforce puts it in a unique and favourable position for companies seeking to protect and exploit their IP here.
The Irish legal system is based on common law principles similar to North American, British and Commonwealth jurisdictions. As a long-standing member of the European Union (EU), businesses located in Ireland also benefit from the expansive EU protections for IP.
Ireland has an independent and efficient court system with a fast-tracked and highly efficient case-managed Commercial Court process which deals with IP rights.
Ireland’s commercially-progressive IP laws protect four principal rights – trademarks, copyright, patents, and designs. With the exception of copyright, all IP rights can be registered for protection. Additionally, EU legislation, and the various international conventions which Ireland has signed up to, provide the ability to simultaneously register IP to obtain protection for trademarks, designs and patents across a number of jurisdictions.
Intellectual Property Tax Advantages
In addition to the 12.5% rate of corporation tax on trading profits which applies to companies which actively exploit IP through Ireland, the Irish tax regime also offers the following benefits to companies involved in the management and exploitation of IP:
A wide network of double taxation treaties which should minimise the instances whereby payments made to an Irish company for royalties suffer withholding tax. Furthermore, unilateral relief should be available for foreign tax suffered on royalties received from non-treaty countries. This generally results in no further liability to Irish tax arising as Ireland’s tax rates are normally lower than the payor’s jurisdiction.
An exemption from Irish withholding tax on patent royalty payments from Ireland to countries with which Ireland has a double tax treaty. No withholding tax arises on other royalties.
Broad exemption from dividend withholding taxes, including on dividends paid to residents of countries with whom Ireland has a double tax treaty. Ireland’s EU membership ensures that EU Parent/Subsidiary Directive enables dividends from group companies resident in other EU countries can be paid free of withholding tax.
A tax write-off for the capital cost of acquiring certain IP, which can result in an effective tax rate of 2.5% on related income. Since 11 October 2017, the aggregate amount of allowances is capped at 80% of profits from the relevant trade in a given accounting period. However, any unused allowances can be carried forward. The acquisition of most types of IP by an Irish company should generally benefit from relief from Irish stamp duty.
An ability to obtain a tax credit in the amount of 25% of qualifying expenditure incurred on research and development activities. This tax credit can be utilised against a current year tax liability, with any excess allowed to be carried back against prior year tax liability, carried forward indefinitely, offset in future tax years, surrendered in a tax efficient manner to key employees or claimed as a refund in certain circumstances.
A knowledge development box regime which came into effect on 1 January 2016 which provides a highly attractive tax rate of 6.25% for income generated from commercialising patents and copyrighted software, particularly helpful for AI entities seeking to qualify for relief.
Recovery of VAT where the Irish company uses the IP for the purposes of its vatable supplies i.e. the sale of goods/rights of the acquired intangible assets or if it intends to make an onward sale of the IP and such supply is subject to VAT.