Patent Royalty tax relief to be abolished


New member
Dec 8, 2010
Hi all.

I just found out this information from a very reliable source who felt it needed to be publicised but cannot do so.

The tax relief on income from patented products researched in Ireland is being cut completely. This will affect all jobs in the R&D industry in Ireland. Thousands of positions will be lost.

Section 2.32 tax relief on stud fees from greyhound breeding will not be affected - income from this will remain totally tax free

Section 2.31 tax relief on profits or gains from stallion fees will also not be affected so those involved in stud farms across this country including some super wealthy individuals will not have to pay a cent in income tax on these fees.

I realise I cannot offer corroboration for these. Apologies for that but the source is good and will be proved true - I am posting this to get the information out into the light as quickly as possible.

Thank you.


Well-known member
Apr 7, 2004
From here, pg. B7:

ABOLITION OF RELIEFS (from 1 January 2011 unless otherwise stated):

Patent Royalty Exemption, effective from the launch of the National Recovery Plan on 24 November 2010.


Well-known member
Feb 22, 2007
Yes the patent royalty relief abolition is being highlighted as a major disaster in the budget briefings which are being sent out by the accountancy firms. I'll try to publish some of these on here later. It makes no sense if we're meant to be incentivising an R&D led recovery. It is also completely out of kilter with moves in the UK where they are shoring up patent incentivisation.


Well-known member
Mar 20, 2005
Wonder did the EU demand this as a price for the retention of the 12.5% corporate-tax rate? They wanted to make us less attractive to FDI and so settled for this instead? The IMF had no incentive to make such demands, as they want to get their money back, while Europe has always had a chip on its shoulder about us supposedly 'poaching' investment from them.


Well-known member
Apr 6, 2008
This is relevant to here I think:

Corporation Tax Reform To Create 'Competition' - UK National News

"The ( UK ) Government has published details of its Corporate Tax Reform programme consisting of a series of essential reforms designed to improve the UK's tax competitiveness. Measures include the introduction of new Controlled Foreign Company (CFC) rules and a commitment to introduce a Patent Box."

- Corporate Tax Road Map that commits to principles that will underpin these reforms and a clear timetable to deliver these changes, including how the Government will engage with business at each stage of policy development

- Details on how the Government will reform the UK's outdated Controlled Foreign Company (CFC) rules by introducing more targeted rules in 2012 and how they will apply to financing and intellectual property. As a first step to make the rules more competitive, a package of interim improvements will be introduced in 2011

- Introducing a Patent Box in April 2013 - a 10% CT rate on profits from patents, reaffirming the Government's commitment to retain and build on the existing Research and Development (R&D) tax credit scheme to create the right environment for innovative companies to prosper

- A commitment to legislate an opt-in exemption for profits earned in foreign branches of UK companies in 2011. Under this more territorial approach, companies in the new regime will no longer be subject to UK CT on their foreign branch profits.

Glaxo in UK jobs boost as tax breaks dished out to multinationals - Leadership, business and management news, tips and features from MT and Management Today magazine

"Some nice PR for GlaxoSmithKline: the pharma giant was singled out by Chancellor George Osborne during his autumn statement yesterday after promising to create about 1,000 new jobs as a result of the Government's new 'patent box' proposal, which will slash the rate of corporation tax charged on profits earned from UK-held intellectual property."

So a PATENT BOX Rate at 10%. Could this cause flow of Pharma FDI over the Irish Sea, back to UK? Add to this now IRL PLC abolishing Patent Royalty Tax relief.

SO, was this the deal for the UK to give us the €7.5bn??


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