https://www.confiduss.com/en/services/solutions/corporate/royalty/ - Irish royalty structures

Ireland based companies are currently very attractive as they can be leveraged for intellectual property exploitation. Until recently, Irish companies were most commonly used as intermediary licensing companies. As of May 2009, Ireland is also an attractive jurisdiction to hold intellectual property profitably.

Ireland: a top choice for royalties
The reason Ireland is such an attractive option for royalty recovery is that there is generally no withholding tax on outgoing royalties (with the exception of patent and mining royalties, but even these may be exempt in certain circumstances).

For many licensing structures, Ireland will be the best location for an intermediary licensing company for the exploitation of all types of intellectual property. With its new, convenient capital grants system, Ireland is now an ideal location for the development, ownership and exploitation of intellectual property. It is important to remember that every case is different and proper advice must always be sought.

About license payments
Royalties from Irish companies may be subject to a 20% withholding tax. However, there is an exception if the recipient is a resident of an EU or contracting state in which royalties are subject to tax. Even where these conditions are not met, by appropriate structuring and by ensuring that the payment is not treated as Irish originating (i.e. ensuring that the patent is not registered or exploited in Ireland, that an Irish bank account is not used, and related agreements are not governed by Irish law etc.) it will in many cases still be possible for an Irish company to pay royalties on patents without any deduction for Irish withholding tax.

Structures where the Irish company is the intellectual property owner
Alternatively, an Irish company may be used to farm intellectual property that it has either developed internally or acquired (including from a related party, in which case the purchase price will be capped at arm's length for tax purposes). . Generous tax credits are available for income from the exploitation of intellectual property, including patents, copyright, trademarks and brands, and know-how (when the income is directly attributable to intangible assets). The allowances available correspond to the depreciation or amortization costs recorded in the balance sheet in accordance with generally accepted accounting principles.