The Institute, as a member of CCAB-I, has made observations on BEPS Action Point 5 – Preferential Regimes and Intellectual Property. This phase of the BEPS work could have knock-on effects for the proposed Knowledge Development Box, and the draft OECD tax proposals are blatantly skewed towards the interests of larger countries.

Our submission identifies risks for smaller economies which would arise on foot of draft conclusions already tabled by the OECD. Ireland has a particular interest in this area of so-called “Preferential Regimes” because the OECD conclusions would limit our Government’s scope to introduce a Knowledge Development Box. The current submission highlights two areas of difficulty for smaller economies; very narrow definitions of eligible innovation, and eligible cost apportionment by reference to spending on development rather than on the ultimate value of the development.

CCAB-I has already made a number of submissions to the OECD, on foot of requests for input or requests for observations on discussion documents. We will make a submission separately to the Department of Finance on the Knowledge Development Box proposals.

The response is published on here.