HM Revenue & Customs - Corporation Tax Reform: Patent Box
Monday 6th of February 2012
Who is likely to be affected?
Companies within the charge to corporation tax that actively hold qualifying patents and some other forms of intellectual property (IP) Patents are used by a wide variety of businesses, but particular sectors likely to benefit are pharmaceuticals, life sciences, manufacturing, electronics, and defence.
General description of the measure
The Patent Box will allow companies to elect to apply a 10 per cent rate of corporation tax from 1 April 2013 to all profits attributable to qualifying patents, whether paid separately as royalties or embedded in the sales price of products. The regime will also apply to other qualifying intellectual property rights such as regulatory data protection (also called ‘data exclusivity’), supplementary protection certificates (SPCs) and plant variety rights. Other non-qualifying profits in these companies will continue to be taxed at the main rate. The Patent Box will potentially benefit a wide range of companies which receive patent royalties, sell patented products, or use patented processes as part of their business.
Policy objective
The Patent Box is part of the Government's growth agenda (as detailed in the Plan for Growth document published in March 2011). The aim of the Patent Box is to provide an additional incentive for companies to retain and commercialise existing patents and to develop new innovative patented products. This will encourage companies to locate the high-value jobs associated with the development, manufacture and exploitation of patents in the UK and maintain the UK’s position as a world leader in patented technologies.
More information can be found:-
