Madam, – The Budget last December brought in an abolition of the patent income tax exemption which has gone below the radar of most commentators. While declaring a vested interest as a patent holder, I still believe this is a short-sighted measure and it will serve to lose valuable investment in research and development which is a stated aim of Government and its agencies.
There is no doubt in my mind that the Revenue sought the abolition of this exemption, using the cover of never missing a genuine opportunity in a crisis. It is well known that the Revenue have sought to have this exemption removed for many years.
However, the fact that the UK government introduced a special 10 per cent corporation tax on profits from patented products developed and produced in the UK in its recent budget, underlines the foolhardiness of the Irish total abolition of the tax exemption.
As a compromise measure, could the application of our corporation tax of 12.5 per cent be considered as the tax rate on patent income, in the same way as stallion stud fees were changed from a zero rating a few budgets ago. Believing that we must remain an attractive location for foreign investment, particularly involving high end R&D, I suggest this change be considered in the forthcoming debates on the Finance Bill. – Yours, etc,