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?
- a company’s accounting period must begin on or after 1 January 2016
- the company must earn income from a usable qualifying asset
- 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.