The Department of Finance has launched a public consultation process on the proposed Knowledge Development Box which was announced by Michael Noonan in his Budget speech last October.

The scheme will replace the controversial double Irish and is essentially a lower corporate tax rate that will apply to earnings arising from intellectual property.

There have been suggestions that the rate will be set at around 5%, similar to that of the Netherlands.

Britain has a rate of 10%. The new scheme expected to come into force next year.

The Knowledge Development Box will be based in part on similar patent box measures which have existed for many years in countries that compete with Ireland for foreign direct investment.

"It will provide an effective tax rate for intellectual property income that is below the normal headline rate of corporation tax with the aim of encouraging companies to locate high-value jobs associated with the development of intellectual property in Ireland," a statement from the Department said today. 

The EU and OECD are currently finalising new rules for the design of such tax incentives.

Mr Noonan has already committed that the Irish scheme will comply with those international standards which are expected to be finalised by the end of this year.

Interested parties are now invited to submit their views on how the KDB should be designed to ensure that it meets the key objective of being the most competitive in class, within the agreed international parameters for fair tax competition. 

The consultation will run for 12 weeks from today until April 8. Further details can be viewed in the consultation document which is available at: http://www.finance.gov.ie/