At present, 13 of the 27 EU Member States have a patent box regime, according to a study published on Tuesday 16 July by the business-oriented think-tank Tax Foundation Europe.
These countries are: Belgium, Cyprus, France, Hungary, Ireland, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Slovakia and Spain. Most patent box regimes have been introduced over the last two decades. Tax rates vary widely from country to country and range from 1.75% in Malta to 10.5% in Slovakia.
These regimes reduce effective tax rates on income from intellectual property, such as patents and software copyrights. Revenues may include royalties, licence fees, gains on the sale of intellectual property, sales of goods and services incorporating intellectual property and damages for patent infringement.
The aim is generally to encourage and attract local research and development (R&D) and to encourage companies to locate intellectual property in the country. However, these regimes can introduce an additional layer of complexity into a tax system and some recent research questions their effectiveness in stimulating innovation.
Many European countries offer additional incentives for R&D, such as direct public support, tax credits or accelerated depreciation of assets.
Read the study: https://aeur.eu/f/d2s (Original version in French by Anne Damiani)