shutterstock-198394652-web
IsaArt / Shutterstock.com
16 September 2014Patents

Calls for German ‘patent box’ tax break

A business lobbying organisation in Germany has called on the government to implement a tax break on profits generated by patented research.

The BDI (Federation of German Industries) said in a statement that the so-called ‘patent box’, currently used in countries including the UK and the Netherlands, would be “considerably more attractive” for inventors to carry out research.

Introduced in the UK in April last year, the patent box enables companies to apply a lower rate of tax to profits earned after April 1, 2013 from patented inventions, as long as the patent was granted at an IP office, such as the European Patent Office or the UK Intellectual Property Office, which is signed up to the scheme.

"In Germany, the taxation of research results is almost six times as high as in the Netherlands and three times as high as in Great Britain," said Markus Kerber, managing director at BDI, in a statement.

"Targeted lower taxation of profits from patents—a so-called patent box—makes it considerably more attractive to do research activities in Germany," he added.

Earlier this year, WIPR reported that the European Commission was launching a probe into the patent box and was seeking answers from several countries.

The probe was launched because the Commission suspected that the scheme breached EU codes of conduct for business taxation.

Ireland, Luxembourg, the Netherlands, Belgium, Gibraltar and Hungary, which all operate similar schemes, were also included in the probe.

Antoine Colombani, Commission spokesperson for competition, said at the time that it was simply gathering information and that it was too early to say whether it would lead to any formal investigations.

Germany has so far not granted any tax advantages for patents, which are generally taxed at around 30% compared with just 10% in the UK.

According to Reuters, Germany’s finance minister Wolfgang Schäuble has previously rallied against competitive practices between countries.

Already registered?

Login to your account

To request a FREE 2-week trial subscription, please signup.
NOTE - this can take up to 48hrs to be approved.

Two Weeks Free Trial

For multi-user price options, or to check if your company has an existing subscription that we can add you to for FREE, please email Adrian Tapping at atapping@newtonmedia.co.uk


More on this story

Patents
12 October 2020   Patent Box legislation has been very much in vogue over the last few years. At their heart, such schemes provide tax incentives to companies selling patented products. But there are questions around whether the Patent Box is achieving its lofty goals, says Matthew Smith of Mewburn Ellis.