Tax heaven for IP owners


Richard Brunner

Luxembourg is an attractive jurisdiction for both intellectual property (IP) management and taxation, because it has a long-established tradition of being business-friendly, especially for R&D-driven companies.

Enterprises can benefit from a stable legal and political system, government support for research projects, private equity seed funding, high educational standards, a multilingual population, international IP management firms, and favourable tax legislation.

Tax exemption for IP

Based on the goals of the EU to make Europe a competitive location for investments in R&D and IP, Luxembourg has introduced a special tax regime for income and capital gains that are generated from IP, which became effective on January 1, 2008. This tax law, which was incorporated as Article 50bis LIR and later specified by a Luxembourg tax authority circular in March 2009, provides for an 80 percent income tax exemption on the positive net income that arises from the commercialisation of certain IP rights.

R&D, tax exemption, OECD, BOIP