Tax Bulletin August/September 2013


The Entrepreneurs Law has made certain changes to the “patent box” regime, which is a regime that allows taxpayers to reduce their corporate income tax base where they license certain intangibles (excluding trademarks) that they have created. The aim of the regime is to encourage Spanish enterprises to invest in the creation of patents and other intangibles.

Notable among the changes to the regime is that the calculation of the reduction will no longer be based on revenues from licensing, but rather on the income obtained, that is, revenues net of the expenses incurred in working the patents or other intangibles. The effect is that now only 40% of the income thus obtained is included in the tax base (versus 50% of the revenues obtained, under the previous regime).

Once the new legislation takes effect, this regime will apply not only to the licensing of intangible assets but also to their transfer, provided that the transfer is between entities that do not form part of a corporate group within the meaning of article 42 of the Commercial Code, although in this case the incentive will be incompatible with the tax credit for the reinvestment of extraordinary income.

To qualify for the incentive, the enterprise need only have created the assets, sharing in 25% of their cost (previously the licensor had to have created the assets in their entirety). The scope of the incentive is also widened to include transactions in which the recipients reside in tax havens, provided that they are located in the EU and the arrangement result from valid economic reasons.

Another positive development is the elimination of the ceiling according to cost existing hitherto, whereby the reduction could only be made until the year in which the threshold of the cost multiplied by six was exceeded.

Lastly, it is also worth noting that taxpayers now have the possibility, before going ahead with a transaction, of asking the tax authorities to adopt an advance pricing agreement and of also requesting an advance agreement classifying the assets as belonging to one of the categories included in the incentive.


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