Brussels, 30/05/2016 (Agence Europe) - The MEPs of the special committee TAXE2 are to call upon the European Commission to present legislative proposals on “patent boxes”, taxation regimes favourable to intellectual property, according to the draft report published on Monday 30 May.
The draft report “notes that until now, patent, knowledge and R&D boxes have not proven effective in fostering innovation in the Union, but are, rather, used by multinationals” in their aggressive tax planning schemes. The report indicates that research and development can be promoted through subsidies and that these subsidies should be preferable to “patent boxes”.
The proposal that the MEPs await from the European Commission should target patent boxes which do not comply with the OED standard on the subject (the “modified nexus approach”) and make sure that when these patent boxes are used, they are limited to genuine economic activities.
Pascal Saint-Amans, Director of the Centre for Tax Policy and Administration at the OECD, recently told a conference in Dublin that patent boxes were not a good incentive to the creation of intellectual property. Quoted by the Irish press, Valère Moutarlier, Director of DG Taxation and Customs Union of the European Commission, expressed agreement with Saint Amans. In the framework of the relaunch of the common consolidated corporate tax base (CCCTB), the Commission is looking at how to devise tax regimes to encourage innovation and research, he said.
The competition services of the Commission at one point looked at patent boxes, but downed tools when an agreement was reached at international level on how to devise them. The Commission no longer saw any need to intervene, but has even so failed to take position on these regimes as regards compliance with state aid rules.
On Monday 30 May, the Italian press also reported on contributions from the minutes of the meetings of the code of conduct on corporate taxation group, which discussed the fact that Rome had introduced a patent box in 2015 which did not comply with international criteria in order to be able to benefit from the grace period (until 2021) offered by the OECD to bring these patent boxes into line. In December 2004, the member states agreed on the need to start legislative work the following year, in order to do this.
In June 2015, in its action plan on corporate taxation, the commissioner pledged that, if it concluded over the next 12 months that the member states were not complying with the international approach, it would prepare binding legislative measures to make sure that they do (see EUROPE 11331).
The draft report of the special committee TAXE 2 also called for the inclusion of a minimum effective taxation clause to be included in the interest and royalties directive. Over at the Council, the Dutch Presidency noted deadlock, in February this year, and has held no more meetings on this subject since then. In documents of which EUROPE has had sight, it also proposed to exempt patent boxes which meet the OECD criteria (modified nexus approach) from this minimum effective taxation clause.
Finally, the draft report of the special committee also calls upon the Commission to establish a code of conduct for financial intermediaries, in particular tax advisers. On 7 June, the Commission is to publish a communication on this dossier. (Original version in French by Elodie Lamer)