shutterstock-64258516-web
Photo: Collina / Shutterstock.com
7 April 2014Patents

Ireland says UK patent box is affecting foreign investment

A tax break for patentees implemented by the UK government is detracting from a similar scheme offered in Ireland, according to Irish officials.

Implemented by the UK Treasury, the “patent box” has provided €367 million ($504 million) in tax breaks since it was introduced last year.

Ireland’s own version of the scheme, implemented in 2009, has provided €205 million in tax relief on new patent applications.

The UK patent box allows innovations to be taxed at 10 percent, instead of the standard rate of 23 percent, causing fears that multinationals will be diverted away from other countries to the UK.

Barry Heavey, head of life sciences at IDA Ireland, the agency responsible for industrial development, told the Irish Independent it was keeping a “watching brief” on developments.

Referring to pharmaceutical company GlaxoSmithKline's intended €500 million investment in research facilities in Scotland, which has been linked to the patent box, Heavey said it was a “significant” win.

"We're keeping a watching brief on this but so far this is the only significant project that has gone elsewhere as a direct result of the patent box."

Richard Asquith, head of tax at TMF Group, also told the newspaper that insurance company Aon had decided to relocate its headquarters to London.

The patent box scheme has not gone unnoticed elsewhere and recently came under European Union scrutiny.

Last month, WIPR reported that the European Commission said it was seeking answers from the UK about the scheme as well as from “several member states,” including Ireland.

The commission said that the scheme could benefit “highly mobile businesses” without triggering additional research and development activity.

A spokesman for the UK Treasury, the government’s finance ministry, said the patent box was introduced to support research and development and “most importantly” growth.

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
28 September 2018   Companies claimed £942.5 million ($1.23 billion) in tax relief under the UK Patent Box in the fiscal year 2016–17, an increase of 25% year on year, according to newly-released data.