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While the patent box system is well-known for encouraging companies to benefit from lower taxation, it is just one part of a complex relationship between IP and tax. WIPR reports.
Brand owners have many incentives to file their IP rights in foreign jurisdictions. One motivator is that some countries have tax reduction schemes designed to attract innovation from overseas businesses.
One example is the patent box scheme, used by several countries to promote research and development (R&D). This is achieved by taxing patent revenues at a lower rate than other commercial revenues. The initiative was first introduced by Ireland, when the country’s 1973 Finance Act provided royalties and other income tax relief from patents licensed there.
Other European countries that have since adopted varying versions of the scheme include France, the Netherlands, Belgium, Hungary, Spain and the UK.
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Tax Cuts and Jobs Act 2017, taxation, tax havens, US Congress, tax strategy, IP assets, innovation, Luxembourg, research and development, incentivise