Knowledge Development Box (KDB)

KDB is a Corporation Tax (CT) relief.

This relief applies to income from qualifying patents, computer programmes and, for smaller companies, certain other certified intellectual property (IP).

To qualify, the company’s accounting period must begin on or after 1 January 2016. If a company qualifies for KDB, it may be entitled to a deduction equal to 50% of its qualifying profits. This means its qualifying profits may be taxed at 6.25%.

How does a company qualify for KDB?

A company may qualify for KDB if it creates a usable qualifying asset from qualifying Research and Development (R and D) activities that earns income.

What is a qualifying asset?

A qualifying asset is one that is created from 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.