October 2014.- The Patent Box is an R & D tax incentive for any company developing and releasing specific intangible assets for exploitation. It consists of a 60% rebate in corporation tax of net income from the sale or transfer of these intangible assets. Intangible assets are understood as patents, industrial designs, utility models and know-how.
Patent Box Application requirements
- The entity should have created the release or sold assets (at least 25%).
- The transferee should apply the usage rights or exploitation to an economic activity.
- There should be a transfer agreement between the two companies.
- Accounting records should be available
Advantages of using Patent Box
- Any type of business can benefit from the incentive.
- It is compatible with other grants and tax deductions for R&D&i.
- It is applicable in companies of the same group.
- You can take advantage of the incentive regardless of the date of creation of the intangible assets.
- It is independent of the company tax base.
- There is no time limit for implementation.
Example of Patent Box use
Company A in the automotive industry, centralizes the company groups’ R&D activity. It has developed a new welding technology. The development cost of that intangible asset is € 500,000. It releases exploitation rights to Company B..
Company B of the same business group, and in the area of manufacturing, buys the rights to use the welding technology from Company A, amounting to 750,000 €.
For Company A, net income from this assignment is € 250,000 (revenue - cost of development).
Patent Box:60% reduction in the corporation tax on net income from the release of the rights to exploit the developed asset. .
Application Patent Box
Net income from the sale of assets: € 250.000
Patent Application Box: (-60%): € -150.000
Corporate tax base: € 100.000
Corporation tax (30%): € 30.000
Without applying Patent Box
Income transfer of assets: € 250.000
Corporate tax base: € 250.000
Corporation tax (30%): € 75.000
Head of Incentives Advisory Unit
Invest in Catalonia