Tax Benefits for Patent Box
Patent Box, good combination of words that can be confusing, and that we try to give a clear view here, to expose how we can help you in this area to apply your tax reductions in the Societies Tax (Impuesto de Sociedades in Spanish) for this concept. This concept is called Royalty Box in Guipúzcoa and Vizcaya, two territories of the Bask Country.
This benefit was born in the European Directive 2003/49/EC, that was no applicable in Spain till 2008, with the modification of art. 23 in the TRLIS with Law 16/2007, but it's been with Law 14/2013 of de support to entrepreneurs and their internationalization, that much progress has been made on several previous uncertainties and uncertainties that had caused many differences and disputes.
First, remember that the right to tax benefit is the transfer of certain intangible assets, including such assignment, use , exploitation and also now transmission , provided that in the latter case is not carried between entities of the same group. We referred at the beginning of this section, to the confusion tems from the use of the word Patent (patent), because patents are only one way of protecting Intellectual Property or assets that collect and protect the knowledge and expertise of the undertakings for several there. Among the concepts that are included in the Patent Box, are, patents, designs, formulas, secret processes, idustrial information, commercial or scientific experience, industrial property and know-how in general. Give use right or making a transmission, is what gives the right to apply a reduction of the basis of the corporate tax. Excluded assets are clearly identified, and are trade or identifying marks, literary, artistic or scientific work including cinematograph films, personal rights such as imaging (copyrights), software, industrial, commercial or scientific, except in Guipúzcoa and Vizcaya where brands do enjoy benefits.
For the assignment to make giving deductibility, it is necessary that the rights assets are credited and that such transfer is documented, so it will be important to protect assets and contract drafting line. In addition, The entity will be able to transfer when at least 25% of cost of the asset (previously 100%), along with the other issue that will help the stimulation of innovation as the source of many intangibles in R&D projects or multilateral cooperation of various entities.
But the big change is in the integration into the calculation of the tax base, which changes as above was integrated into the base 50% of revenues and hereafter will integrate 40% of the rents. For assets not recognized in balance, it is understood that the rents are 80% of revenues. Along with this modification adds the deductible limit removal that was before 6 times the original cost, which will also help to provide long-term continuity of these operations. As a whole, but especially the latter, do reflect a clear intention to increase economic operations in this area, being a distinctive benefit those who do.
Now it will also be possible to agree with the Administration prior valuation of revenues, expenses and income from transfer operations, as well as an agreement of classification of assets, although ne both cases it will be necessary to wait for its regulatory development.
This new configuration of the Patent Box benefit is into force since 29/SEP/2013.But it's not all advantages, since assignments made before this law, will continue to operate under previous normative. Finally, just to remind that this tax benefit is incompatible with the deduction for extraordinary benefits reinvestment.
There are several aspects related to groups of companies that are taxed on the tax consolidation regime, and focus on two important aspects on the one hand it is not possible to take advantage of Patent Box for transmission within a group, and secondly, operations leading to the implementation of the Patent Box, will be subject to documentation requirements, in relation to the valuation of transactions. In this respect we understand that particularly focus will be made to ensure that assignments are made at "market price", talking about transfer pricing.
Please take into account ATEC+ID to apply and document these benefits. You can also account for ATEC+ID to get assessed about the use of protected actives