An international round table held at the Alliott Group's EMEA Regional Conference in Berlin enabled tax expert members to share insights into the incentives offered by their countries to attract investment into innovation and R&D. Such incentives are focused on R&D tax relief and the favourable tax treatment of intellectual property ("IP Box" or "Patent Box") on its exploitation. Alliott Group's tax expert members also explained how laws in their countries are evolving following the OECD's Base Erosion and Profit Shifting initiative targeted at artificial IP tax regimes.
Are we talking about harmful tax practices?
While tax incentives to encourage investment into a particular country are all part and parcel of the global competition that goes on between governments, the international OECD/G20-led project to counteract manipulation of tax regimes (known as BEPS) takes aim at those countries which offer generous tax incentives without there being any significant economic activity or substance. Their efforts are intended to ensure tax and tax reliefs relate to where economic activity and profit is actually generated.
Marie-Lise Swinne, Partner at Tax Consult in Belgium clarified that this activity is defined as 'R&D activity' and the OECD's solution is that the 'nexus principle' should be integrated into all IP tax regimes across the globe.
Read the full article: https://www.alliottgroup.net/practice-management-resources-for-owner-managed-firms/patent-box-regimes-tax-ip-innovation/
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.