Knowledge Development Box (KDB)

KDB is a Corporation Tax (CT) relief on income from qualifying assets.

A company qualifying for KDB may be entitled to a deduction equal to 50% of its qualifying profits. This means its qualifying profits may be taxed at an effective rate of 6.25%.

How does a company qualify for KDB?

To qualify:

  •  a company’s accounting period must begin on or after 1 January 2016
  •  the company must earn income from a usable qualifying asset
  • and
  • the company must have created the usable qualifying asset from qualifying Research and Development (R and D) activities.

What is a qualifying asset?

A qualifying asset is one that is created from qualifying R and D activities such as:

  • a computer programme
  • an invention protected by a qualifying patent
  • IP for small companies which is certified by the Controller of Patents as patentable, but not patented.

How to apply for KDB

A company should use the Revenue Online Service (ROS) to apply for KDB on their CT return.

See the Guidance Notes on the Knowledge Development Box for further information about KDB.