What useful life should be considered when estimating the TAB factor of an intangible asset?

Amortisation of intangible assets is not always tax deductible. Its deductibility depends on the corporate income tax legislation of single countries. Most countries define maximum amortisation rates or minimum number of years in which the amortisation of intangible assets can be deducted, if at all. This page displays the legal tax amortisation periods of the main types of intangible assets.

Summary Table

CountryPatentsTechnologyTrademarkCustomer relationships GoodwillLast update
Ireland15 or RUL15 or RUL15 or RUL15 or RUL15Apr 16

Further Detail and Source Legislation

Tax amortisation of intangibles in Ireland is explained in the Irish Taxes Consolidation Act of 1997.[1]

The scheme of amortisation deductions ('capital allowances') for expenditure incurred on intangible assets was introduced in Finance Act 2009[2] and provided for under section 291A TCA 1997. The scheme was amended again by Finance Act 2010[3], extending of the list of specified intangible assets to include applications for patents, copyright and broadening the definition of know-how.

The definition of intangible assets displayed in Paragraph (1) of Section 291A[4] includes, among others:

  1. any patent
  2. any trademark
  3. computer software
  4. secret processes/formulae/information concerning industrial, commercial or scientific experience, whether protected or not by patent, copyright or a related right
  5. know-how: industrial information and techniques likely to assist in the manufacture or processing of goods or materials, or in the carrying out of any agricultural, forestry, fishing, mining or other extractive operations
  6. externally acquired goodwill that is directly attributable to any of the other specified intangible assets listed in section 291A(1).[5]

Allowances provided under the scheme reflect the standard accounting treatment of intangible assets and is based on the amount charged to the profit and loss account of the company for the accounting period in respect of the amortisation or depreciation of the specified intangible asset. However, companies can opt instead for a fixed write-down period of 15 years[6] at a rate of 7 per cent per annum and 2 per cent in the final year. The option for a fixed write-down period also caters for non-depreciating assets which are not depreciated in company accounts.

  1. ^ Irish Taxes Consolidation Act of 1997 (unamended)
  2. ^ Finance Act 2009
  3. ^ Finance Act 2010
  4. ^ Section 291A of the Taxes Consolidation Act 1997, as amended up to and Including Financt Act 2012
  5. ^ Q3: How is goodwill treated under the scheme?
  6. ^ Notes for Guidance - Taxes Consolidation Act 1997 - Finance Act 2012 Edition - Part 9

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