Monday, 16 January 2012

Patent Box – reduced tax on patent profits

What better way to encourage growth in UK innovation and products than reducing the level of tax payable on patents? And, this is exactly what the government is proposing to start in 2013. Following a consultation last year, the government has drafted legislation (and guidance) to reduce the corporation tax for qualifying patents to only 10% from the existing rates of 20-27.5%. The wide scope of the legislation means that all companies that receive royalties for patents and sell or use products or processes protected by patent for new and existing IP could benefit.

Qualifying Patents would include patents granted by the IPO, European Patent Office, regulatory data protection, supplementary protection certificates (SPCs) and plant variety rights and the Patent Box would cover products paid for separately or embedded in the price of products. However, identifying and calculating the relevant taxable income is not going to be straightforward and some say this might even diminish the appeal of the Patent Box savings altogether.
We’ll report back when we hear further.

1 comment:

  1. Interesting - I've campaigned vigorously (with the aid of my MP) for Plant Variety Rights to be included in the Patent Box, as the law prevents anyone from obtaining either UK or EU patent in a plant variety. However, whilst the guidance notes say that PVR are included (and one assumes that will be both UK PVR issued by the Plant Variety Rights Office (PVRO) and Community Plant Variety Rights issued by the Community Plant Varieties Office (CPVO)), I see no specific mention of PVR in the draft legislation - merely reference to the potential for Government to add to the list of included IP by Statutory Instrument. I wonder when such SI will be brought forward?

    I also notice that for "licensed-in" IP, there is a requirement for exclusivity, at least at national level. Is not a national exclusivity in conflict with EU competition/freedom of movement of goods legislation?

    ReplyDelete

Thanks for your comment. We look forward to hearing from you again soon.